Question 1Letrtdenotes the return of a financial asset andtdenotes the standard deviation of returns at time t. If rt follows an ARMA(1,2) model,rt=0+1rt1+et+1et1+2et2,(a) Derive the unconditional mean of rt,E(rt) (show all necessary steps and conditions).(b) For given information available at time t, derive the 1-step, 2-step and3-step ahead forecasts of rt(show all necessary steps and conditions).(c) If we estimate the ARMA(1,2) model, we obtain0= 0.3,1= 0.4,1=0.6 and2= 0.8, compute the unconditional mean E(rt) based on the answer in (a);(d) Compute the E(rt=3|It=2),E(rt=4|It=2) and E(rt=5|It=2) based on the information provided in the Table 1.Table 1: Monthly returnstrtet13.10.32-1.10.53?-4?-5?-