Question: Please show work for thumbs up:) Suppose the stock return y, follows an AR(1) process: Yt 0.1 +0.2y-1 + ut WN(0,1) ut N (a) Compute

Please show work for thumbs up:)

Please show work for thumbs up:) Suppose the stock return y, follows

Suppose the stock return y, follows an AR(1) process: Yt 0.1 +0.2y-1 + ut WN(0,1) ut N (a) Compute E(y), Yo Y1, and 11: (b) Suppose y = 0.4. Compute Er(4x+1), MSPE[E7(9:+1)], E (Y:+2), and MSPE[E(Yx+2)]. Suppose the stock return y, follows an AR(1) process: Yt 0.1 +0.2y-1 + ut WN(0,1) ut N (a) Compute E(y), Yo Y1, and 11: (b) Suppose y = 0.4. Compute Er(4x+1), MSPE[E7(9:+1)], E (Y:+2), and MSPE[E(Yx+2)]

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