Example: moving average model Moving average model: Yt W₁Ut+W₂4t-1 + W3 Ut-2 • Writing all the equations (e.g. k = 3): У1 Y₂ Уз U1 0 42 U3 : UT Solve least squares problem! U1 42 : UT-1 0 U1 : UT-2 for all t W₂ W3

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