3. (a) Consider the Model Yt = Mt + Xt where Var(Y) (Recall that i = (n+1)(n+1)n). (b) Consider the Model Y = Mt+Xt, where = Bo+Bt+Bt (Bo, B, B R) and E[Xt] = 0 for every t. Write down the least square function Q(Bo, B, B). (c) Define the Sample Autocorrelation Function. (d) Give the definition of Correlogram. (e) Which Null Hypothesis Ho is this plot testing? Can we reject Ho? ACF 1.0 0.6 0.8 -0.2 0.0 0.2 0.4 0 ft = t and X is a Random Walk. Compute Series ACF_Plot_Problem3_Midterm 1 5 10 Lag 15 20