Consider the following AR(1) process:

Yt = c+Y(t1)+t, with t N(0,2)

1. What process do you obtain when c = = 0?
2. Assume = 1.5 what can you say about the stationarity and invertibility of the

process?

3.Assume || < 1, derive the corresponding MA() representation of the process.

4.Assume || < 1, compute E[Yt ].

5.Assume || < 1, compute V[Yt].