The data file freddie 2 contains monthly housing price indices for the prices of houses in ChampaignUrbana, Illinois (CHURB), and Charlottesville, Virginia (CHARV) from 1982M1 to 2015M12.

a. Plot the two series on the one graph and comment on the plots.

b. Using a 5\% significance level, test each of the two series for unit roots and find the order of integration of each series. Explain your choice of test equations. Are the series trend stationary? Are the series first-difference stationary? Are the series second-difference stationary?

c. Using a 5\% significance level, test whether CHURB and CHARV are cointegrated.

d. Plot the first differences of the two series on the one graph and comment on the plots.

e. Using a 5\% significance level, test whether the first differences of CHURB and CHARV are cointegrated.