
Explanation:
This question requires the application of the properties of the Lag operator. Recall that:
And that the lag operator has multiplicative property. So,
Rearranging we get:
Therefore, option A is correct.
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The lag operator is applied to the AR times series as follows:
What is the resulting time series?
A
$0.2Y_{t-1} + 0.6Y_{t-4} - 0.12Y_{t-5} + \epsilon_t$
B
C
D
$0.1Y_{t-1} + 0.6Y_{t-4} - 0.2Y_{t-5} + \epsilon_t$
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