Q3B. Assess whether the following AR(1) process satisfies the criteria for covariance stationarity, taking into consideration all three conditions that define a covariance stationary process. Assume that u~i.i.d(0,02), where a 1. Provide the working steps and underlying assumptions used to prove if each property holds. y = 2+0.3yt-1+ut

MATLAB: An Introduction with Applications
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Author:Amos Gilat
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Chapter1: Starting With Matlab
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can you do only 3b

Q3A. Assuming that Assumption 4 (Zero Conditional and Unconditional Mean) holds,
what is the value of corr(x, e)? Provide the working steps and underlying assumptions
used to arrive at your answer.
Q3B. Assess whether the following AR (1) process satisfies the criteria for covariance
stationarity, taking into consideration all three conditions that define a covariance
stationary process. Assume that u~i.i.d(0, o), where a = 1. Provide the working
steps and underlying assumptions used to prove if each property holds.
Yt = 2 + 0.3yt-1+U₂
Transcribed Image Text:Q3A. Assuming that Assumption 4 (Zero Conditional and Unconditional Mean) holds, what is the value of corr(x, e)? Provide the working steps and underlying assumptions used to arrive at your answer. Q3B. Assess whether the following AR (1) process satisfies the criteria for covariance stationarity, taking into consideration all three conditions that define a covariance stationary process. Assume that u~i.i.d(0, o), where a = 1. Provide the working steps and underlying assumptions used to prove if each property holds. Yt = 2 + 0.3yt-1+U₂
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