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Information Flag question The file Home Sales.wf1 contains data on sales of new, one-family homes (in thousands) and the 30-year mortgage rate. While the file

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Information Flag question The file Home Sales.wf1 contains data on sales of new, one-family homes (in thousands) and the 30-year mortgage rate. While the file contains data through part of 2017, pretend that the data ends at the end of 2015. Information Plot sales against time. Submit the graph on the main Gauchospace page. Flag question Question 1 Not yet answered Regress sales on a time trend and a dummy for each month. How much higher do you expect sales to be in March compared to December? Points out of 2.50 Flag question Answer: Question 2 Not yet answered Based on this model, what do expect sales to be in July 2017? Points out of 2.50 Flag question Answer: Question 3 Not yet answered Now add the mortgage rate to the model. Forecast sales again for July 2017. Oh, but there is a problem; in 2015 you don't know what the mortgage rate will be in 2017. So build a model in which the mortgage rate depends on a constant, a time trend, and two lags of the mortgage rate. Use this to forecast the mortgage rate for July 2017. Then use this forecast value in your equation for sales to forecast for July 2017 Points out of 2.50 P Flag question Answer: Information Flag question The file Home Sales.wf1 contains data on sales of new, one-family homes (in thousands) and the 30-year mortgage rate. While the file contains data through part of 2017, pretend that the data ends at the end of 2015. Information Plot sales against time. Submit the graph on the main Gauchospace page. Flag question Question 1 Not yet answered Regress sales on a time trend and a dummy for each month. How much higher do you expect sales to be in March compared to December? Points out of 2.50 Flag question Answer: Question 2 Not yet answered Based on this model, what do expect sales to be in July 2017? Points out of 2.50 Flag question Answer: Question 3 Not yet answered Now add the mortgage rate to the model. Forecast sales again for July 2017. Oh, but there is a problem; in 2015 you don't know what the mortgage rate will be in 2017. So build a model in which the mortgage rate depends on a constant, a time trend, and two lags of the mortgage rate. Use this to forecast the mortgage rate for July 2017. Then use this forecast value in your equation for sales to forecast for July 2017 Points out of 2.50 P Flag

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