Question: 1. (5 points) Assume we have the below model for the mean-volatility dynamics. rt = Mt + et where pt follows an AR(1) process. What

1. (5 points) Assume we have the below model for the

1. (5 points) Assume we have the below model for the mean-volatility dynamics. rt = Mt + et where pt follows an AR(1) process. What is the consequnce if you estiamte the mean-volatility dynamics by a constant mean model? 1. (5 points) Assume we have the below model for the mean-volatility dynamics. rt = Mt + et where pt follows an AR(1) process. What is the consequnce if you estiamte the mean-volatility dynamics by a constant mean model

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