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To have a good fitted model, for R to be P, R-P=e has to be minimum, so b1 abd b2 in fitted model is
obtained by minimizing sum of e-square (why e-square and not e?)
What is Q?
OLS minimizes e!
I as a researcher propose the Beta model and not the b model (based on my educated guess work)
How much is the variation in losses around the mean is the losses due to cost of refining around its
mean: R2