Determining the autoregressive model

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Autoregressive model

Suppose an autoregressive model is used for data in which quarterly sales in 2005 were: 1.9, 1.7, 2.2, and 2.3 ($Billion).

a) Here are the last several values of the series: 88.48, 85.31, 78.79, 82.55, and 85.93. What price does this model predict for the next value in the series?

b) The next value in the series was, in fact, 86.85. Compute the APE.

c) Find a prediction based on a 2-point moving average. How does it compare with the AR model?

Reference no: EM131008082

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