A Second-Order Autoregressive Model for Average Mortgage Rate Is

question 91

Short Answer

A second-order autoregressive model for average mortgage rate is:
Rate_i = -2.0 + 1.8 (Rate)_i-1 - 0.5 (Rate)_i-2.
If the average mortgage rate in 2012 was 7.0,and in 2011 was 6.4,the forecast for 2014 is ________.

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Definitions:

Magical Thinking

The belief that one's thoughts, words, or actions can influence or bring about events in the physical world in a way that defies the known laws of nature.

Thought Insertion

A psychological phenomenon in which an individual believes thoughts that are not their own have been inserted into their mind.

Strong Final Remarks

The concluding statements in a communication or document that leave a powerful impression on the recipient.