Recently, fixed mortgage rates have been at historical lows due to the housing slowdown. Data in the

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Recently, fixed mortgage rates have been at historical lows due to the housing slowdown. Data in the Excel file mortgage rates.xlsx show the annual average 30-year fixed mortgage rate for 1994 to 2017, as reported by Freddie Mac.

a. Construct a graph showing the average December mortgage rate over time.

b. Forecast the average mortgage rate in 2018 using a trend projection.

c. Calculate the MAD for this forecast.

d. Check for the presence of positive auto-correlation.

e. What limitations do you foresee with this forecasting method projecting mortgage rates several years into the future?

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Business Statistics

ISBN: 9780134685267

3rd Edition

Authors: Robert A. Donnelly

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