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Time Series, Forecasting, Autocovariance and Autocorrelation

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November 7th, 2022

I would appreciate it if someone could provide the solution to QA1 of the attatched exam paper.

SECTION A
A1 (a) Give the definitions of the autocovariance and autocorrelation of a time series model.
(b) Calculate the autocovariance and autocorrelation function for the time series
Y = 3 + Zt + 1/2Zt-1 + 1/5Zt-2,
where {Zt} are independent N(O, 1) random variables.

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