Read Section 4.1, “General linear processes,” on pages 55-56. Know the equations in this section; they are basic tools for time series analysis.

Read Section 4.2, “Moving average processes,” on page 57-58.

Note the negative sign for è in equation 4.2.1. Don’t err by using “+è” on an exam problem.

Know equations 4.2.2 on page 57; they are tested on the final exam. Know the table on the top of page 58. An exam problem may give you è₁ and ask for ñ₁ (or vice versa).

As you work through the modules, keep the parameters distinct. The true parameters are unknown; we must estimate them. These are the ö and è parameters. These parameters imply the autocorrelation function, the ñ parameters. We observe sample autocorrelations, or the r parameters, from which we back into estimates of the ö and è parameters.

Pages 58 through 62 are mostly graphs. Understand what the graphs show; you need not memorize their shapes, but you must know the principles of a high or low autocorrelation.

Don’t just flip pages. The authors often show two or more graphs, with different values of a time series parameter. Understand how the parameter affects the shape of the graph.

Read pages 62-65 on moving average processes.

Know equation 4.2.3 on page 63. Work through the derivation on pages 62-63. After a few exercises, the procedure is not hard.

Know equation 4.2.4 on page 65. The final exam tests 4.2.4, but not 4.2.5.