Question #77
Reading: Reading 2 Time-Series Analysis
PDF File: Reading 2 Time-Series Analysis.pdf
Page: 38
Status: Unattempted
Correct Answer: A
Question
Which of the following statements regarding a mean reverting time series is least accurate?
Answer Choices:
A. If the time-series variable is x, then xt = b0 + b1xt-1
B. If the current value of the time series is above the mean reverting level, the prediction is that the time series will decrease
C. If the current value of the time series is above the mean reverting level, the prediction is that the time series will increase
Explanation
If the current value of the time series is above the mean reverting level, the prediction is
that the time series will decrease; if the current value of the time series is below the mean
reverting level, the prediction is that the time series will increase.