Question: Let rt be at = Ety w + Q1a_1 (rt- ) = 0 (rt-1 u) + at where {et}'s are i.i.d. N(0,1) random variables. Suppose

Let rt be at = Ety w + Q1a_1 (rt- ) = 0 (rt-1 u)

Let rt be at = Ety w + Q1a_1 (rt- ) = 0 (rt-1 u) + at where {et}'s are i.i.d. N(0,1) random variables. Suppose u = 0.4, o = 0.45, w = 1, 0.3. and ai Find E(r2 r1 = 1, ro = 0.2). Find Var(r2 r1 = 1, ro = 0.2). Let rt be at = Ety w + Q1a_1 (rt- ) = 0 (rt-1 u) + at where {et}'s are i.i.d. N(0,1) random variables. Suppose u = 0.4, o = 0.45, w = 1, 0.3. and ai Find E(r2 r1 = 1, ro = 0.2). Find Var(r2 r1 = 1, ro = 0.2)

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