Which is the R command to estimate the model 𝑟" =f$ +f& 𝑟"'& +f( 𝑟"'( +f) 𝑟"') + 𝑎" −q& 𝑎"'& ? Suppose x is the time series 𝑟" in the R command.a. arima(x,order=c(1,0,3))b. arima(x,order=c(3,1,0))c. arima(x,order=c(3,0,1))d. arima(x,order=c(0,1,3))

The correct answer is b. arima(x,order=c(3,1,0))

Here's why:

The ARIMA model is represented as ARIMA(p,d,q) where:

• p is the order of the Autoregressive part
• d is the order of the differencing involved
• q is the order of the Moving average part

In the given model 𝑟" =f$ +f& 𝑟"'& +f( 𝑟"'( +f) 𝑟"') + 𝑎" −q& 𝑎"'&, we can see that:

• There are 3 past values of the variable r (𝑟"'&, 𝑟"'(, 𝑟"')), which means the order of the Autoregressive part (p) is 3.
• The term 𝑎" −q& 𝑎"'& represents the difference between the current error term and the past error term, which means the order of differencing (d) is 1.
• There is no moving average part in the model, which means the order of the Moving average part (q) is 0.

Therefore, the correct R command to estimate this model is arima(x,order=c(3,1,0)).