2. Predicting Economic Growth: Suppose we regress quarterly economic growth on a constant and the last four quarterly economic growth numbers. That is, we estimate the AR(4) model. Suppose we find Y, = 0.02 +0.1.Y-1 +0.05 Y.-2 +0.02. Y-3 +0.02.Y-4 + &r. where the error term is uncorrelated with the regressors. Further, suppose that Y, = -0.06 and Y-1 Y-2 Y-3 = 0.02. Predict economic growth one quarter ahead and two quarters ahead, i.e. calculate Y+1 and Y +2. 3. Predicting Volatility: Suppose we regress the squared return of the S&P 500 on a constant and the lagged squared return. Suppose we find R = 0.001 +0.1. RZ-1. Let R-0.1.Predict next days volatility, i.e. calculate Ri. 2. Predicting Economic Growth: Suppose we regress quarterly economic growth on a constant and the last four quarterly economic growth numbers. That is, we estimate the AR(4) model. Suppose we find Y, = 0.02 +0.1.Y-1 +0.05 Y.-2 +0.02. Y-3 +0.02.Y-4 + &r. where the error term is uncorrelated with the regressors. Further, suppose that Y, = -0.06 and Y-1 Y-2 Y-3 = 0.02. Predict economic growth one quarter ahead and two quarters ahead, i.e. calculate Y+1 and Y +2. 3. Predicting Volatility: Suppose we regress the squared return of the S&P 500 on a constant and the lagged squared return. Suppose we find R = 0.001 +0.1. RZ-1. Let R-0.1.Predict next days volatility, i.e. calculate Ri