yt = yt1 + et,

where

et N(0, 2

t )

and

t = 0.1t, for t = 1, 2, ..., T

Using this information,

(i) Explain the apparent contradiction between your conclusion in Question 4(ii) and

your answer in Question (3).

(ii) Show how this time series may be transformed to become stationary. Be clear when

showing the mathematical steps involved.