# Question: In Figure fitted autoregressive models of orders 1 through 4

In Figure, fitted autoregressive models of orders 1 through 4 are given for annual sales data. We then selected a model by testing the null hypothesis of autoregression of order p – 1 against the alternative of autoregression of order p at the 5% significance level. Repeat this procedure, but test at the 10% significance level.

a. What autoregressive model is now selected?

b. Obtain forecasts of sales for the next 3 years, based on this selected model.

a. What autoregressive model is now selected?

b. Obtain forecasts of sales for the next 3 years, based on this selected model.

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