2. Suppose that we have an AR(2) model as follows: yt = 0.1 + 1yt1 + 2yt2 + ut, where ut follows a white noise process with mean zero and variance 2 u = 0.2. Please compute the following: (a). Assume that 1 and 2 take values that make the model stationary. What is the mean of yt? (b). Compute E[yt+1|t]. (c). Compute E[yt+2|t]. (d). Assume that 1 = 0.803 and 2 = 0.682. Derive the equation in stationarity condition and check whether this AR(2) process is stationary. (Hint: You can use the function 'polyroot' in R to solve a polynomial equation.)