Question: Y is a random variable with mean =2 and variance o2=25. Suppose you don't know the value of u but you have access to a

Y is a random variable with mean =2 and variance

Y is a random variable with mean =2 and variance o2=25. Suppose you don't know the value of u but you have access to a random sample with n=100 observations from the same population. Let 7 denote the sample mean of Y computed form this sample. Next, predict the value of Y using 7/2. a) Compute the bias of the prediction b) Compute the mean and variance of the prediction error c) Compute the MSPE of the prediction (hint: recall that the MSPE is equal to the sum of the variance and bias? of the prediction error) d) Does 7 /2 produce a prediction error with a lower MSPE than the 7 prediction

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