Question 13.44

13.44 OPEC basket prices.

Continue the previous exercise.

opec

  1. Obtain a PACF for the OPEC price series. How many lags does the PACF suggest should be considered in building a lag-based model?
  2. Based on your results from part (a), fit an appropriate lag model and report it.
  3. Obtain the residuals from the model fit in part (b) and test the residuals for randomness. What do you conclude?
  4. The last price in the series is for August 13, 2014. Based on the fitted model, what are the forecasts for August 14 and August 15?