Hi I am not clear with the formula given to estimate the variance of et on pg 26. The formula is stated in terms of alphas,betas and error terms. So alpha and beta values we have estimated earlier which would be used here. But what value will we use for e(t-1)...e(t-q) terms? Pls explain.
Hello The residuals also come from the procedure used to estimate the alpha and beta parameters, which is described at the start of section 3.4. Hope this helps Andy
