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If εt Is the Error in Time T,εt-1 is the Error

Question 141

Multiple Choice

If εt is the error in time t,εt-1 is the error in the previous time period,ρ is the correlation coefficient,and μt a random variable with autocorrelation,which of the following is the first-order autoregressive model of autocorrelated behavior?


A) εt = ρεt-1μt
B) εt = If ε<sub>t</sub> is the error in time t,ε<sub>t</sub><sub>-1 </sub>is the error in the previous time period,ρ is the correlation coefficient,and μ<sub>t</sub> a random variable with autocorrelation,which of the following is the first-order autoregressive model of autocorrelated behavior? A) ε<sub>t</sub> = ρε<sub>t</sub><sub>-1</sub>μ<sub>t</sub> B) ε<sub>t</sub> = C) ε<sub>t</sub> = ρε<sub>t</sub><sub>-1</sub> + μ<sub>t</sub> D) ε<sub>t</sub> = ρε<sub>t</sub><sub>-1</sub> - μ<sub>t</sub>
C) εt = ρεt-1 + μt
D) εt = ρεt-1 - μt

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