# Question

a. Define a random walk in terms of the relationship between successive observations.

b. Carefully distinguish a random noise process from a random walk.

c. Comment on the following: If it’s a random walk, then special time-series methods aren’t needed to analyze it.

d. What is the effect of the drift term in a random walk?

e. Describe the forecasts for a random walk process.

b. Carefully distinguish a random noise process from a random walk.

c. Comment on the following: If it’s a random walk, then special time-series methods aren’t needed to analyze it.

d. What is the effect of the drift term in a random walk?

e. Describe the forecasts for a random walk process.

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