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Basic Question 0 of 9
ARCH means:
B. The variance of the error term is not constant in all periods.
C. The variance of the error term in one period depends on the variance of the error in previous periods.
D. The covariance of the time series with itself is not constant in all periods.
A. The error term of the current period is correlated with the error term of the previous period.
B. The variance of the error term is not constant in all periods.
C. The variance of the error term in one period depends on the variance of the error in previous periods.
D. The covariance of the time series with itself is not constant in all periods.
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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
explain how time-series variables should be analyzed for nonstationarity and/or cointegration before use in a linear regression;
determine an appropriate time-series model to analyze a given investment problem and justify that choice.
CFA® 2026 Level II Curriculum, Volume 1, Module 5.