A Second-Order Autoregressive Model for Average Mortgage Rate Is

question 75

Short Answer

A second-order autoregressive model for average mortgage rate is:
Rateᵢ = - 2.0 + 1.8(Rate)ᵢ₋₁ - 0.5 (Rate)ᵢ₋₂.
If the average mortgage rate in 2010 was 7.0, and in 2009 was 6.4, the forecast for 2012 is ________.

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Definitions:

Wood Bats

Sporting equipment made of wood, typically used in baseball, characterized by its material which affects the game’s dynamics.

Center Field Wall

A barrier or fence that marks the outer boundary of the center field area in a baseball field.

Granite Floors

Flooring made from granite, a durable and aesthetically pleasing natural stone.

Pine Tar

A sticky material produced by the high temperature carbonization of pine wood, used especially in treating the sails and rigging of ships and in baseball to improve grip on the bat.