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Please show your work and explain your answer 2. Suppose we test for risk predictability in a stock, and get the regression equation below. Suppose

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Please show your work and explain your answer

2. Suppose we test for risk predictability in a stock, and get the regression equation below. Suppose rt=0.05. Compute the one step and two step ahead risk forecasts, i.e. Et(rt+12) and Et(rt+22) rt+12=0.02+0.25rt2+t+1

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