# Question: Refer to the data file Hourly Earnings showing earnings over

Refer to the data file Hourly Earnings, showing earnings over 24 months. Denote the observations xt (t = 1, 2, .., 24). Now, form the series of first differences:

zt = xt – xt-1 (t = 2, 3, c, 24)

Fit autoregressive models of orders 1-4 to the series zt.

Using the approach of this section for testing the hypothesis that the autoregressive order is p – 1 against the alternative of order p, with a 10% significance level, select one of these models. Using the selected model, find forecasts for zt, where t = 25, 26, and 27. Hence, obtain forecasts of earnings for the next 3 months.

zt = xt – xt-1 (t = 2, 3, c, 24)

Fit autoregressive models of orders 1-4 to the series zt.

Using the approach of this section for testing the hypothesis that the autoregressive order is p – 1 against the alternative of order p, with a 10% significance level, select one of these models. Using the selected model, find forecasts for zt, where t = 25, 26, and 27. Hence, obtain forecasts of earnings for the next 3 months.

**View Solution:**## Answer to relevant Questions

Explain the statement that a time series can be viewed as being made up of a number of components. Provide examples of business and economic time series for which you would expect particular components to be important. The data file Fargo Electronics Sales shows quarterly sales of a corporation over a period of 6 years. a. Draw a time plot of this series and discuss its features. b. Use the seasonal-index method to seasonally adjust this ...The data file Earnings per Share shows earnings per share of a corporation over a period of 28 years. Compute a simple, centered 7-point moving average series for the corporate earnings data. Based on a time plot of the ...Refer to the data of Example 17.2. If a total sample of 100 colleges is to be taken, determine how many of these should be 4-year schools under each of the following schemes. a. Proportional allocation b. Optimum allocation, ...A bank holds 720 delinquent mortgages in residential properties. It required an estimate of the mean current appraised value of these properties. Initially, a random sample of 20 was appraised, and a sample standard ...Post your question