Corporate triple-A bond interest rates for 12 consecutive months follow. (a) Construct a time series plot. ● 11.0- 10.5 10.0 9.5 FELP 9.0 8.5 8.0 7.5- 7.0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Month 11.0 T 10.5 10.0 1 4 2 3 7 9.5 9.3 9.5 9.6 9.9 9.8 9.8 10.5 10.0 9.7 9.7 9.6 What type of pattern exists in the data? O The data appear to follow a trend pattern. O The data appear to follow a cyclical pattern. The data appear to follow a horizontal pattern. O The data appear to follow a seasonal pattern. 5 8 6 Month 9 10 9.5 11 9.0 12 8.5 8.0 7.5 7.0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Month (b) Develop three-month and four-month moving averages for this time series. (Round your answers to two decimal places.) Time Series Value 3-Month Moving Average Forecast 4-Month Moving Average Forecast 9.5 9.3 9.5 | C C r [ 10.0 r 9.9 9.8 10.5 9.7 9.7 C J - 7 = C C 11.0 T | 10.5 10.0- 9.5 9.0 8.5 8.0 7.5 7.0+ 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Month ⓇO 11.0- ✓ 10.5 10.0- 9.5 9.0 8.5 8.0 7.5+ 7.0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Month @

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Does the three-month or four-month moving average provide more accurate forecasts based on MSE? Explain.
The three-month moving average provides more accurate forecasts, because its MSE is smaller than that of the four-month moving
average.
O The four-month moving average provides more accurate forecasts, because its MSE is smaller than that of the three-month moving
average.
O The three-month moving average provides more accurate forecasts, because its MSE is larger than that of the four-month moving average.
O The four-month moving average provides more accurate forecasts, because its MSE is larger than that of the three-month moving average.
(c) Using the more accurate approach, what is the moving average forecast for the next month? (Round your answer to two decimal places.)
Transcribed Image Text:Does the three-month or four-month moving average provide more accurate forecasts based on MSE? Explain. The three-month moving average provides more accurate forecasts, because its MSE is smaller than that of the four-month moving average. O The four-month moving average provides more accurate forecasts, because its MSE is smaller than that of the three-month moving average. O The three-month moving average provides more accurate forecasts, because its MSE is larger than that of the four-month moving average. O The four-month moving average provides more accurate forecasts, because its MSE is larger than that of the three-month moving average. (c) Using the more accurate approach, what is the moving average forecast for the next month? (Round your answer to two decimal places.)
Corporate triple-A bond interest rates for 12 consecutive months follow.
(a) Construct a time series plot.
●
11.0-
10.5
10.0
9.5
FEEL
9.0
8.5
8.0
2
11.0 T
1
4
10.5
10.0
3
6
7
9.5 9.3 9.5 9.6 9.9
What type of pattern exists in the data?
O The data appear to follow a trend pattern.
O The data appear to follow a cyclical pattern.
The data appear to follow a horizontal pattern.
O The data appear to follow a seasonal pattern.
5
B
Month
9
10
9.5
11
9.0
12
8.5
8.0
7.5+
7.0
0 1 2 3 4 5 6 7 8 9 10 11 12 13
Month
(b) Develop three-month and four-month moving averages for this time series. (Round your answers to two decimal places.)
Time Series
Value
3-Month Moving
Average Forecast
9.5
9.3
9.5
9.6
9.9
9.8
9.8
10.5
10.0
9.7
9.7
9.6
9.8 10.5 10.0 9.7
C
T
T
r
r
00
C
11.0 T
r
10.5
10.0-
9.5
9.0
8.5
8.0
9.7 9.6
4-Month Moving
Average Forecast
7.5
7.0
0 1 2 3 4 5 6 7 8 9 10 11 12 13
Month
0°
11.0 T
7.5
7.0
0 1 2 3 4 5 6 7 8 9 10 11 12 13
Month
10.5
10.0
9.5
9.0
8.5
8.0
7.0
0 1 2 3 4 5 6 7 8 9 10 11 12 13
Month
Ⓒ
Transcribed Image Text:Corporate triple-A bond interest rates for 12 consecutive months follow. (a) Construct a time series plot. ● 11.0- 10.5 10.0 9.5 FEEL 9.0 8.5 8.0 2 11.0 T 1 4 10.5 10.0 3 6 7 9.5 9.3 9.5 9.6 9.9 What type of pattern exists in the data? O The data appear to follow a trend pattern. O The data appear to follow a cyclical pattern. The data appear to follow a horizontal pattern. O The data appear to follow a seasonal pattern. 5 B Month 9 10 9.5 11 9.0 12 8.5 8.0 7.5+ 7.0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Month (b) Develop three-month and four-month moving averages for this time series. (Round your answers to two decimal places.) Time Series Value 3-Month Moving Average Forecast 9.5 9.3 9.5 9.6 9.9 9.8 9.8 10.5 10.0 9.7 9.7 9.6 9.8 10.5 10.0 9.7 C T T r r 00 C 11.0 T r 10.5 10.0- 9.5 9.0 8.5 8.0 9.7 9.6 4-Month Moving Average Forecast 7.5 7.0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Month 0° 11.0 T 7.5 7.0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Month 10.5 10.0 9.5 9.0 8.5 8.0 7.0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Month Ⓒ
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