Question: Consider the ARMA(2.1) model Y = 3 + 0.9Yt-1 + 0.1Yt-2 +E+ - 0.2E-1 i) Is the process stationary? ii) Given Yn-2 = 101,

Consider the ARMA(2.1) model Y = 3 + 0.9Yt-1 + 0.1Yt-2 +E+

Consider the ARMA(2.1) model Y = 3 + 0.9Yt-1 + 0.1Yt-2 +E+ - 0.2E-1 i) Is the process stationary? ii) Given Yn-2 = 101, Yn-1 = 99.5, Yn = 102.3 and En-1 = 1.2, what are the forecasts of Yn+1. Yn+2, Yn+3?

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