From the equation
X t=δ+ϕ 1X t−1 +ω t, ω t∼N(0,σ ω2 )
we see that the current value X t depends only on its immediately preceding value
X t−1plus a white-noise term 𝜔𝑡.
This is precisely the definition of an AR(1) (autoregressive of order 1) process—there is one autoregressive term, no moving-average terms, and no differencing. Thus, the best match is:
D. AR(1)
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SuntzuLegacy
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