Question: Using the average baseball salary from 2000 through 2019 data for Problem 16.18 (stored in MLB Salaries) a. Fit a third-order autoregressive model to the

Using the average baseball salary from 2000 through 2019 data for Problem 16.18 (stored in MLB Salaries)
a. Fit a third-order autoregressive model to the average baseball salary and test for the significance of the third-order autoregressive parameter. (Use a = 0.05.)
b. If necessary, fit a second-order autoregressive model to the average baseball salary and test for the significance of the second-order autoregressive parameter. (Use a = 0.05.)
c. If necessary, fit a first-order autoregressive model to the average baseball salary and test for the significance of the first-order autoregressive parameter. (Use a = 0.05.)
d. Forecast the average baseball salary for 2020.

Problem 16.18

The average salary of Major League Baseball players on opening day from 2000 to 2019 is stored in MLB Salaries and in the following table.

Year Salary ($millions) Year Salary (Smillions) 2000 1.99 2010 3.27 2001 2.29

Year Salary ($millions) Year Salary (Smillions) 2000 1.99 2010 3.27 2001 2.29 2011 3.32 2002 2.38 2012 3.38 2003 2.58 2013 3.62 2004 2.49 2014 3.81 2005 2.63 2015 4.25 2006 2.83 2016 4.40 2007 2.92 2017 4.70 2008 3.13 2018 4.63 2009 3.26 2019 4.70

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