Question: Consider the AR(1) model Yt = 5 0.55Yt1 + Et and assume that ^2 = 1.2. (a) Is this process stationary? Why or why not?

Consider the AR(1) model Yt = 5 0.55Yt1 + Et

and assume that ^2 = 1.2.

(a) Is this process stationary? Why or why not?

(b) What is the mean of this process?

(c) What is the variance of this process?

(d) What is the covariance function of this process?

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