An equation for the random walk model is given by the equation: $D Y _ { t } = \mu + \varepsilon _ { t }$
,where $D Y _ { t }$
is the change in the time series from time t to time t - 1, $\mu$
is a constant,and $\varepsilon _ { t }$
is a random variable (noise)with mean 0 and some standard deviation $\sigma$
.

Question

An equation for the random walk model is given by the equation: $D Y _ { t } = \mu + \varepsilon _ { t }$ 
,where $D Y _ { t }$ 
is the change in the time series from time t to time t - 1, $\mu$ 
is a constant,and $\varepsilon _ { t }$ 
is a random variable (noise)with mean 0 and some standard deviation $\sigma$ 
.

Quizplus · Accepted Answer

The random walk model can be expressed as $Y_t = Y_{t-1} + \mu + \varepsilon_t$, which implies that the change $D Y_t = Y_t - Y_{t-1} = \mu + \varepsilon_t$.

An Equation for the Random Walk Model Is Given by the Equation