Due date 30th april, 2018.04.12 answer all questions.
a. What is weak stationarity and the order of integration of a random variable? why is it
important to test whether the data is stationary or not?
b. Check whether the series below is weak stationarity
Yt  Yt 1   t
Yt   0  1Yt 1   t where 1  1
Yt  0  1 t 1   t
c. Describe the Dicker-Fuller procedure for testing stationarity and the order of integration of a
random variable?
d. Illustrate the BIC and Akaike criterion to choose the lags to include in the model?