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An analyst models the quarterly sales growth data of an online retailer and observes that the model's error term is heteroskedastic and follows an ARCH(2) process. This implies that the variance of the error term in the current quarter:
A
follows an autoregressive moving-average (ARMA) process.
B
depends linearly on the squared errors from the previous two quarters.
C
depends linearly on a time trend and the squared error from the previous quarter.
