Consider the following portion of data on the variable y. t........................... y 1...................... 29.32 2...................... 30.96 .....................................
Question:
Consider the following portion of data on the variable y.
t........................... y
1...................... 29.32
2...................... 30.96
⋮..................................... ⋮
24.................... 48.58
a. Estimate an autoregressive model of order 1, yt = β0 + β1yt−1 + εt, to make a one-step-ahead forecast (t = 25) for y.
b. Estimate an autoregressive model of order 2, yt = β0 + β1yt−1 + β2yt−2 + εt , to make a one-step-ahead forecast (t = 25) for y.
c. Which of the above models is more appropriate for forecasts? Explain.
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a Model 1 b Model 2 c We choose Model 1 bec...View the full answer
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Related Book For 
Business Statistics Communicating With Numbers
ISBN: 9780078020551
2nd Edition
Authors: Sanjiv Jaggia, Alison Kelly
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