The model y_t = y_{t -} ₁ + e_t, t = 1, 2, … represents a: A)AR(2) process. B)MA(1) process. C)random walk process. D)random walk with a drift process.

Name: The model y t = y t - 1 + e t , t = 1, 2, … represents a: A)AR(2) process. B)MA(1) process. C)random walk process. D)random walk with a drift process.
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Question

Quizplus · Accepted Answer

The given model is a random walk process because it is expressed as the current value being equal to the previous value plus a white noise error term, without any drift component.

The Model Yt = Yt - 1 + Et, T

The Model Y_t = Y_{t -} ₁ + E_t, T