If a Series, Y_t, Follows a Random Walk (With No

question 16

Multiple Choice

If a series, y_t, follows a random walk (with no drift) , what is the optimal 1-step ahead forecast for y?

• A) The current value of y.
• B) Zero.
• C) The historical unweighted average of y.
• D) An exponentially weighted average of previous values of y.

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Definitions:

Lateral Malleolus

The bony prominence on the outer side of the ankle, forming the lower end of the fibula.

Ulnar Notch

A depression on the distal end of the radius bone that articulates with the head of the ulna, allowing wrist movement.

Medial Epicondyle

The bony projection on the inner side of the humerus just above the elbow joint, where certain ligaments and tendons of the forearm attach.

Greater Tubercle

A prominent area on the lateral aspect of the proximal humerus, serving as an attachment site for the muscles of the shoulder.