Generate Random Walk

[SR1987]

Hi everyone,

I'm very unexperienced with EViews but an assignment for one of my classes requires me to use it. My situation so far is that I have two series (two different stock indices), x1 and x2, and I converted both into log indices, lx1 and lx2. I also made two extra series that take the difference between two following periods in both lx1 and lx2, creating dlx1 and dlx2. Now I am supposed to generate a Random Walk process, which my professor says can be done by clicking Object -> New Object -> Equation and typing dlx1= c + e, where e is the residual. EViews does not accept this. I also have to estimate c and I have no idea how to do this. The exact assignment is : "Estimate a random walk with drift for both indexes in levels. Comment on the drift terms". If anyone could tell me how to do this exactly, that would be very helpful.

Thanks in advance.