A Second-Order Autoregressive Model for Average Mortgage Rate Is $\left. \left. \operatorname { Rate } _ { i } = - 2.0 + 1.8 \text { (Rate } \right) _ { i - 1 } - 0.5 \text { (Rate } \right) _ { i - 2 }$

question 66

Short Answer

A second-order autoregressive model for average mortgage rate is: $\left. \left. \operatorname { Rate } _ { i } = - 2.0 + 1.8 \text { (Rate } \right) _ { i - 1 } - 0.5 \text { (Rate } \right) _ { i - 2 }$ .
If the average mortgage rate in 2012 was 7.0, and in 2011 was 6.4, the forecast for 2014 is
__________.

---

Definitions:

Evolutionary Approach

A perspective in psychology that interprets human behaviors and mental processes as adaptations that have evolved to increase survival and reproduction.

Mental Representations

Internal cognitive symbols that represent external reality or abstract concepts, enabling thinking and problem-solving.

Ecological Approach

An Ecological Approach examines individuals in the context of their environment, emphasizing the interaction between people and their surroundings.

Information Processing

The means by which information is encoded, stored, processed, and retrieved, particularly in the human mind or in computers.