Question: Self-check Activity: Problem Solving a) Define the term's weak stationarity, Integrated of order one and uniform mixing. How would you asses the stationarity of a

Self-check Activity: Problem Solving a) Define the term's weak stationarity, Integrated

Self-check Activity: Problem Solving a) Define the term's weak stationarity, Integrated of order one and uniform mixing. How would you asses the stationarity of a variable X (30%) b) Suppose X was the US stock market index and your data period was from 1920-1938 (to include the stock market crash). How would the testing procedure for stationarity be affected? (30%) c) If both the Dollar/Sterling exchange rate (E) and the Yen/Dollar exchange rate (Y) were I (1) but there was in fact no relationship between the two variables, what would you expect the result would be of performing the following regression. (40%) E-a + bY tv

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