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Find the three-step ahead forecast, E T y T+3 , when the random walk plus drift model is used. To get the marks for this
Find the three-step ahead forecast, ETyT+3, when the random walk plus drift model is used. To get the marks for this questionyou should follow the 2 step procedure outlined in class (update and make a guess). Your forecast should depend on a constant. Make sure you explain how you would estimate that constant.
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