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USE STATA software and download the data here http://www.principlesofeconometrics.com/stata/sales.dta The file sales.dta contains 157 weekly observations on sales revenues ( sales ) and advertising expenditure

USE STATA software

and download the data here

http://www.principlesofeconometrics.com/stata/sales.dta

The file sales.dta contains 157 weekly observations on sales revenues (sales) and advertising expenditure (adv) in millions of dollars for a large US department store for 2005-2007. The weeks are from December 28, 2004, to December 25, 2007.

  1. (a)Graph the series forsales. Does it appear to be stationary, trend stationary or stochastic?
  2. (b)Formally test for the presence of a unit root.
  3. (c)Examine the autocorrelation function and propose one or two possible models that may have generated the series.
  4. (d)Estimate the model(s) proposed in part (c).
  5. (e)Assess your model(s) using if possible formal tests and/or information criteria.
  6. (f)Estimate the model you deem most appropriate and estimate it again on the first 100 observations.
  7. (g)Generate forecasts for the next 57 observations, and plot forecasted and actual observations. Assess the goodness of the forecasting power of your model

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