Question: 2. Let ribe at = Ety w + Q1a-1 (rt - u) = 0 (rt-1-u) + at where {at}'s are i.i.d. N(0,1) random variables. Suppose

2. Let ribe at = Ety w + Q1a-1 (rt - u) = 0

2. Let ribe at = Ety w + Q1a-1 (rt - u) = 0 (rt-1-u) + at where {at}'s are i.i.d. N(0,1) random variables. Suppose u = 0.4, 0 = 0.45, w = 1, and @j = 0.3. Find E(r2 r1 = 1,70 = 0.2). Find Var(r2 | r1 = 1, ro = 0.2). 2. Let ribe at = Ety w + Q1a-1 (rt - u) = 0 (rt-1-u) + at where {at}'s are i.i.d. N(0,1) random variables. Suppose u = 0.4, 0 = 0.45, w = 1, and @j = 0.3. Find E(r2 r1 = 1,70 = 0.2). Find Var(r2 | r1 = 1, ro = 0.2)

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