Which of the Following Statements Is True

question 20

Multiple Choice

Which of the following statements is true?

• A)A random walk process is stationary.
• B)The variance of a random walk process increases as a linear function of time.
• C)Adding a drift term to a random walk process makes it stationary.
• D)The variance of a random walk process with a drift decreases as an exponential function of time.

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Definitions:

T-Distribution

A type of probability distribution that is symmetric and bell-shaped, used in statistics for small sample sizes when the population variance is unknown.

Confidence Interval

A scope of values, derived through sample statistical methods, seen as likely to include the value of an unascertained population parameter.

Population Mean

The average of a set of numerical values obtained from every member of a population.

Robust Estimator

A statistical method or measure that is not unduly affected by outliers or deviations from assumptions in the underlying data distribution.