# Question: Consider a random walk model with the following equation Yt

Consider a random walk model with the following equation: Yt = Yt -1 + 500 9 et, where et is a normally distributed random series with mean 0 and standard deviation 10.

a. Use Excel to simulate a time series that behaves according to this random walk model.

b. Use the time series you constructed in part a to forecast the next observation.

a. Use Excel to simulate a time series that behaves according to this random walk model.

b. Use the time series you constructed in part a to forecast the next observation.

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