Consider the Following Model Estimated for a Time Series Y_t $\varepsilon$

question 13

Multiple Choice

Consider the following model estimated for a time series y_t = 0.3 + 0.5 y_t-1 - 0.4 $\varepsilon$ _t-1 + $\varepsilon$ _t
Where $\varepsilon$ _t is a zero mean error process.
What is the (unconditional) mean of the series, y_t ?

• A) 0.6
• B) 0.3
• C) 0.0
• D) 0.4

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