Financial Forecasting Homework 6 Autocorrelation

1)What is Autocorrelation?

2)How is Autocorrelation related to Trending?

3)What is the Autocorrelation Correlation Coefficient ACCC?

4)What information does the ACCC give us?

5)Autocorrelation can be easily calculated in Excel. How?

6)If the Autocorrelation is very high, what does that mean for forecasting?

7)Autocorrelation in the stock market has decreased and is close to zero. Is this beneficial for forecasting?

8)Typically there is higher Autocorrelation to more recent lags. What does that mean?

9)Do most economic variables exhibit mean reversion. If yes, why?

10) Explain why Autocorrelation and Mean Reversion are 'opposite properties'!