1) Consider the MA(1) model y, = u+&+ 0&+1+ V, where v-N(0,0), j0| < 1. a) Under what conditions is the process covariance stationary? b) What condition is required to insure invertibility? c) Why is invertibility a desirable property? d) Show that first differencing the following equation will result in an MA(1) model. yt =a+ bT +et Where Y time trend (1,2,3,4,....)

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