Question: . Consider the following stochastic process y = 0.4 +0.3 yt-1 + et-1 where et-1 is white noise with variance equal to 1. Find

. Consider the following stochastic process y = 0.4 +0.3 yt-1 +

. Consider the following stochastic process y = 0.4 +0.3 yt-1 + et-1 where et-1 is white noise with variance equal to 1. Find Ely], E[ylyt-1], Var(y), Corr(yt, Yt+1), and Corr(yt, Yt+2). Document all your calculations. I [25 marks]

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