Suppose the following time series model has been fit to historical data and found to be an
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Yt = 35 + εt + .25εt-1 - .30εt-2
The first four observations are Y1 = 32.5, Y2 = 36.6, Y3 = 33.3, and Y4 = 31.9. Assuming 1 = 35 and ε0 = 0, calculate forecasts for periods 5, 6, and 7 if period 4 is the forecast origin.
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