Question: Q2C. Considering the following MA(3) process: yt = Ut - 0.7ut-1 - 0.2ut-2 + 0.4ut-3 Where ut is a white noise process with variance equal

Q2C. Considering the following MA(3) process: yt = Ut - 0.7ut-1

Q2C. Considering the following MA(3) process: yt = Ut - 0.7ut-1 - 0.2ut-2 + 0.4ut-3 Where ut is a white noise process with variance equal to 1. What is the value yk = cov(yt, Vt-k) for k = 0? Provide the correct answer along with the working steps and underlying assumptions used to calculate the value of k = cov(yt, yt-k) for k = 0. i. Vo = 1.69 ii. Vo = 0.63 iii. Yo = 1 iv. Vo = 0 (4 marks)

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