Question: 6. If the expected value E of Yt+1, given yt, is E[Yt+1 |yt ] = 35.2+0.8yt, for what values of yt is the expected value

6. If the expected value E of Yt+1, given yt, is E[Yt+1 |yt ] = 35.2+0.8yt, for what values of yt is the expected value E[Yt+1|yt ] greater than yt? (Application: yt = height of father, in cm. Yt+1 = height of son.) SOLUTION: 35.2 + 0.8yt > yt,, 0.2yt < 35.2, which gives (A) yt < 176 cm. (B) yt < 35.2 cm. (C) yt < 180 cm. (D) yt < 170 cm

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