The AR(p)model
A)is defined as Yt = β0 + βpYt-p + ut.
B)represents Yt as a linear function of p of its lagged values.
C)can be represented as follows: Yt = β0 + β1Xt + βpYt-p + ut.
D)can be written as Yt = β0 + β1Yt-1 + ut-p.

Question

Quizplus · Accepted Answer

The AR(p) model represents Yt as a linear function of p of its lagged values, as given by the equation Yt = β0 + β1Yt-1 + β2Yt-2 + ... + βpYt-p + ut. Therefore, option B is the correct choice. Option A is incorrect because it only represents the lagged value of Yt-p, whereas the AR(p) model includes multiple lagged values. Option C includes an additional independent variable, Xt, which is not present in the AR(p) model. Option D is incorrect as it only includes the lagged value of Yt-1, whereas the AR(p) model includes multiple lagged values.