Question: Compare and contrast the stochastic processes: (a) white-noise process, (b) innovation process, (c) martingale difference process. (d) Explain why a martingale difference process can accommodate

Compare and contrast the stochastic processes:

(a) white-noise process,

(b) innovation process,

(c) martingale difference process.

(d) Explain why a martingale difference process can accommodate dynamic heteroskedasticity but the innovation process cannot.

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