Suppose the following time series model has been fit to historical data and found to be an adequate model Yt 35 t 25t 1 30t 2 The first four observations are Y1 32 5, Y2 36 6, Y3 33 3, and Y4 31 9 Assuming 1 35 and 0 0, calculate forecasts for periods 5, 6, and 7 if period 4 is the forecast origin ...

Suppose the following time series model has been fit to historical data and found to be an

Question:

Suppose the following time series model has been fit to historical data and found to be an adequate model.
Yt = 35 + εt + .25εt-1 - .30εt-2
The first four observations are Y1 = 32.5, Y2 = 36.6, Y3 = 33.3, and Y4 = 31.9. Assuming 1 = 35 and ε0 = 0, calculate forecasts for periods 5, 6, and 7 if period 4 is the forecast origin.