Please note that this question for Computer Science and Finance

Question 7) Let us assume we are dealing with the following stochastic process. Figure 1 shows us the first 607 observations whereas Figure 2 shows us the first 1000 observations. (Note: Pay attention to the scale on the y-axis!) The process is defined as p(x)=Cx with =2.19. Figure 1: First subsample of a simulated Power Law process Figure 2: Overall sample of a simulated Power Law process Which statement is true? We can estimate the mean using the Law of Large Number as we have >>30 observations. We can use Maximum-Likelihood Estimation (MLE) to estimate the theoretical mean but we are likely to overestimate . We can use Maximum-Likelihood Estimation (MLE) to estimate the mean but we are likely to underestimate . The process does not have a defined theoretical mean. The theoretical variance of the process does exist