Question: (Forecast Variance) Suppose that you have sample data on a pair of variables: ((x n , y n ); n = 1,..., N). Under the

(Forecast Variance) Suppose that you have sample data on a pair of variables: ((x_n, y_n); n = 1,..., N). Under the assumptions of Proposition 5 (Variances of OLS, p. 157), find the conditional variance of the forecast error of the OLS forecast $$β_1 + β_2x_{N+1}$$ for y_N+1 given {x_n; n = 1,..., N+1} using the simple regression model E[y_n|x_n] = $$β_0 + β_2x_n$$.

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