guys anyone know how to calculate the variance of the error term in the factor covariance formula (var © = b12 x Var(a) + b22 Var(b) + 2 b1 x b2 x cov (a,b) + var( error term in the regression) )
there was a recent practice question but the var of the error is not given. i assumed it is zero but in the answer it is not but not clear how to calculate it