An Estimated Second-Order Autoregressive Model for Average Mortgage Rate Is $\hat { \gamma } _ { t } = - 2.5 + 1.8 y _ { t - 1 } - .5 y _ { t - 2 }$

question 107

Essay

An estimated second-order autoregressive model for average mortgage rate is: $\hat { \gamma } _ { t } = - 2.5 + 1.8 y _ { t - 1 } - .5 y _ { t - 2 }$ .If the average mortgage rate in 2003 was 7.0,and in 2002 was 6.5,the forecast for 2004 is ____________________,and for 2005 is ____________________.

---

Definitions:

Capacity

The maximum level of output that a company can sustain to make a product or provide a service.

Job-Order Costing

A cost accounting system that calculates the cost of individual jobs or orders, commonly used in custom manufacturing.

Automated Shaper

A machine that uses computer controls to cut and shape materials with precision, often used in manufacturing for consistent and efficient production.

Manufacturing Overhead

Costs associated with manufacturing a product that are not directly tied to the factory's operations.