Essay ECON1061 – Forecast Future Gold Prices – Economics Assignment Help

Assignment Task

Question 1 The below graph plots the daily prices of Gold over time.

a) Examine the plot and describe the issues that may arise when trying to forecast future Gold prices given this time series data. Offer solutions to these issues.

b) Offer a suitable forecasting method for this data.

Question 2 For each of the below ACF plots which are obtained for a time series data of 4 different variables of interest:

a) Explain the ACF plot.

b) Describe what the raw data is likely to look like over time.

c) What kind of variable is this plot likely to characterise (e.g., stock prices, exchange rates, temperature, etc.)?

Question 3 The following ACF plots were produced for raw data of monthly sales of two different variables, A and B.

a) Explain which variable is likely to be easier to forecast.

b) Explain how your answer to part a) would change if these were residuals of an ARIMA model instead of “raw data of monthly sales”.