Question #29
Reading: Reading 2 Time-Series Analysis
PDF File: Reading 2 Time-Series Analysis.pdf
Page: 13
Status: Unattempted
Correct Answer: A
Question
Which of the following is NOT a requirement for a series to be covariance stationary? The:
Answer Choices:
A. expected value of the time series is constant over time
B. covariance of the time series with itself (lead or lag) must be constant
C. time series must have a positive trend
Explanation
For a time series to be covariance stationary: 1) the series must have an expected value
that is constant and finite in all periods, 2) the series must have a variance that is constant
and finite in all periods, and 3) the covariance of the time series with itself for a fixed
number of periods in the past or future must be constant and finite in all periods.