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A Second-Order Autoregressive Model for Average Mortgage Rate Is

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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 2008 was 7.0,and in 2007 was 6.4,the forecast for 2009 is ________.


Definitions:

Important Ideas

Concepts or points that are considered to be of significant value or consequence in a particular context.

Subordinate Idea

A concept or thought that supports or is secondary to a main idea in a discussion or argument.

Dependent Clause

A collection of words that includes both a subject and a verb, yet fails to convey a full idea and is unable to function independently as a sentence.

Complex Sentence

A sentence that contains one independent clause and at least one dependent clause, expressing multiple ideas.

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