QUESTION 18

Which of the following statements is not necessarily true of stationary processes:

a. The mean is the same for all time periods

b. The variance is the same for all time periods

c. The covariances between X and X t-s are the same for all s.

Od. The effect of past shocks dies away.

QUESTION 19

Which of these is not a viable 'solution for heteroscedasticity?

a. Transforming the variables into logs

b. Using heteroscedasticity-consistent standard error estimates

c. Taking the first difference of the series

d. Using generalised least squares if the form of heteroscedasticity is known