Question: Answer both parts, I'll rate For two time series data X and Y, assume that the ADF test at the levels gave the following results:

Answer both parts, I'll rate

For two time series data X and Y, assume that the ADF test at the levels gave the following results: Dependent variable: D(X) Dependent variable: D(Y) Variable Coefficient Std. Error Variable Coefficient Std. Error C 1.140 0.631 C 1.534 0.689 X(-1) -0.196 0.108 Y(-1) -0.220 0.101 D(X(-1)) 0.513 0.163 D(Y(-1)) 0.328 0.182 D(X(-2)) -0.410 0.174 a. From the above results, which series is or is not stationary? Use a = 0.10 [5 marks] b. How would you suggest a proper regression model to examine the relationship between the two series? Explain. [5 marks]

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