CFA Practice Question

There are 208 practice questions for this study session.

CFA Practice Question

Select the correct statement(s):

I. A first-differenced random walk is a special case of AR (1) model with b0 = 0 and b1 = 0.
II. Stationarity in the past implies stationarity in the future.
A. I only
B. Both are true
C. None of them
Explanation: II: It does not guarantee it.

User Contributed Comments 4

User Comment
dblueroom The first one is difficult, second one is way too easy.
Flavorman key points=>>>>>
random walk is a special case of AR(1)with b0=0 & b1=1
first difference random walk is a special case of AR(1) with b0=0 &b1=0.
siggarusfigs but if it's differenced then it's no longer a random walk, right?
chriswwu I think you are right, siggarusflgs, since b1<>1.
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