Consider a random walk model with the following equation: Yt = Yt -1 + 500 9 et,

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Consider a random walk model with the following equation: Yt = Yt -1 + 500 9 et, where et is a normally distributed random series with mean 0 and standard deviation 10.
a. Use Excel to simulate a time series that behaves according to this random walk model.
b. Use the time series you constructed in part a to forecast the next observation.

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Data Analysis And Decision Making

ISBN: 415

4th Edition

Authors: Christian Albright, Wayne Winston, Christopher Zappe

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