Question: 2. Suppose we test for risk predictability in a stock, and get the regression equation below. Suppose rt=0.05. Compute the one step and two step

2. Suppose we test for risk predictability in a stock, and

2. Suppose we test for risk predictability in a stock, and get the regression equation below. Suppose rt=0.05. Compute the one step and two step ahead risk forecasts, i.e. E(rt+12) and E(r+22). r2=0.02+0.25r12+l

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