Suppose the process for y, is given by: Yt = 0.1 +0.4ut-1 +0.2ut-2 -0.1ut-3 + ut Given that you observe ut-1 = 0.3, ut-2 = -0.6 and ut-3 = -0.3, the optimal forecast for yt+2 is: Select one: a. None of these b. - 0.1 c. 0.07 d. 0.4 e. 0.0

Suppose the process for y, is given by: Yt = 0.1 +0.4ut-1 +0.2ut-2 -0.1ut-3 + ut Given that you observe ut-1 = 0.3, ut-2 = -0.6 and ut-3 = -0.3, the optimal forecast for yt+2 is: Select one: a. None of these b. - 0.1 c. 0.07 d. 0.4 e. 0.0

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Suppose the process for y, is given by:
Yt = 0.1 +0.4ut-1 +0.2ut-2 - 0.1ut-3 + ut
Given that you observe ut-1 = 0.3, ut-2 = -0.6 and ut-3 = -0.3, the optimal
forecast for yt+2 is:
Select one:
O
a. None of these
b. - 0.1
c. 0.07
d. 0.4
e. 0.0

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