Predictive-Analytics- -Assignment-1 PDF

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Predictive-Analytics-Assignment-1...

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Question 1: ● Present summary statistics for the disposable income series:

● Create two plots, one for the disposable income series and one for its autocorrelation: - Plot for the disposable income series: Using the autoplot() function , we get the following graph:

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Plot for its autocorrelation: Using the acf() function, we get the following graph:

● What are the relevant features of the data? Can you confirm them from the autocorrelation

function? From the graph, we can say that the data is consistent and symmetric through the period. We can also confirm this latter from the autocorrelation function above. ● Would it make sense to transform the data? Why? Yes, it makes sense to transform the data as it will simplify the pattern of the series and therefore help us look deeper into the growth rate. Question 2: ● Transform the series to create a series for the growth rate of disposable income in US. Plot the growth series and its autocorrelation function and comment it: Before plotting it, we convert the data into log format to smoothen the series, and this is done using the following code: ln_dpi...