Question: Please show your work and explain your answer 2. Suppose we test for risk predictability in a stock, and get the regression equation below. Suppose

Please show your work and explain your answer 2. Suppose we

Please show your work and explain your answer

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. Et(rt+12) and Et(rt+22) rt+12=0.02+0.25rt2+t+1

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