Assignment:
HSH® Associates, financial publishers, is the nation’s largest publisher of mortgage and consumer loan information. Every week it collects current data from 2,000 mortgage lenders across the nation. It tracks a variety of adjustable rate mortgage (ARM) indexes and makes them available on its Web site. The file ARM contains the national monthly average one-year ARM for the time period January 2004 to December 2008.
a. Produce a scatter plot of the federal ARM for the time period January 2004 to December 2008. Identify any time-series components that exist in the data.
b. Identify the recurrence period of the time series. Determine the seasonal index for each month within the recurrence period.
c. Fit a nonlinear trend model containing coded years and coded years squared as predictors for the deseasonalized data.
d. Provide a seasonally adjusted forecast using the nonlinear trend model for January 2009.
e. Diagnose the model.
Provide complete and step by step solution for the question and show calculations and use formulas.