c4solutions_0501 - COURSE 4 MAY 2001 MULTIPLE-CHOICE ANSWER...

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Course 4: May 2001 - 41 - STOP 1 D 26 A 2 B 27 E 3 C 28 E 4 E 29 D 5 C 30 C 6 C 31 A 7 D 32 A 8 E 33 A 9 D 34 D 10 A 35 E 11 D 36 D 12 E 37 B 13 B 38 B 14 C 39 E 15 A 40 C 16 C 17 E 18 A 19 B 20 E 21 C 22 E 23 B 24 B 25 C COURSE 4 MAY 2001 MULTIPLE-CHOICE ANSWER KEY
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C42001A Course 4 Exam Solutions May 2001 Item Number: 1 Key: D Solution Because the autocorrelation function is zero starting with lag 2, this must be an MA(1) model. Then, 2 2 1 1 1 1 1 1 2 1 .4 , .4 .4 ,.4 .4 0. 1 q r q q q q q - - = = - - = - - + = + This quadratic equation has two roots, 0.5 and 2. Because the coefficient’s absolute value must be less than 1, only 0.5 is acceptable.
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