An Estimated Second-Order Autoregressive Model for Average Mortgage Rate Is $\tilde { y } _ { z } = - 3 + 2.0 y _ { t - 1 } - .75 y _ { t - 2 }$

question 211

Essay

An estimated second-order autoregressive model for average mortgage rate is: $\tilde { y } _ { z } = - 3 + 2.0 y _ { t - 1 } - .75 y _ { t - 2 }$ .If the average mortgage rate in 2004 was 6.5 and in 2011 was 6.0,the forecast for 2013 is ____________________.

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Definitions:

Financial Statement

A written record that conveys the business activities and the financial performance of a company; main statements include balance sheet, income statement, and cash flow statement.

Temporary/Permanent

Refers to accounts within accounting practices; temporary accounts are reset each accounting period, while permanent accounts carry their ending balance into the next period.

General Journal Entries

The initial records where all financial transactions of a business are noted, using the double-entry method of accounting.

Account Balance

The amount of money in a financial repository at any given moment, which can include debts owed or credits available.