Question: 17.12 a. Suppose that u N(0, s2 u). Show that E(eu) = e1 2s2 u b. Suppose that the conditional distribution of u given

17.12

a. Suppose that u N(0, s2 u). Show that E(eu) = e1 2s2 u

b. Suppose that the conditional distribution of u given X = x is N(0, a + bx2), where a and b are positive constants. Show that E(eu 0X = x) = e1 2(a + bx2).

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