Which of these is an appropriate way to determine the order of an ARMA model required to capture the dynamic features of a given data?
A) Graphically plotting the time series of the data
B) Determining the number of parameters that maximises the information criteria
C) Determining the number of parameters that minimises the information criteria
D) None of the above

Question

Quizplus · Accepted Answer

Determining the number of parameters that minimises the information criteria (such as AIC or BIC) is a common method for selecting the order of an ARMA model. This approach balances model fit with model complexity to avoid overfitting.

Which of These Is an Appropriate Way to Determine the Order