Question: Suppose that Y1, Y2, . . . is an AR(1) process with = 0.5, = 0.4, and 2 = 1.2. (a) What is

Suppose that Y1, Y2, . . . is an AR(1) process with μ = 0.5, ϕ = 0.4, and σ2∈ = 1.2.
(a) What is the variance of Y1?
(b) What are the covariances between Y1 and Y2 and between Y1 and Y3?
(c) What is the variance of (Y1 + Y2 + Y3)/2?

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