Corporate triple-A bond interest rates for 12 consecutive months follow. O (a) Construct a time series plot. 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 What type of pattern exists in the data? O The data appear to follow a trend pattern. O The data appear to follow a seasonal pattern. O The data appear to follow a horizontal pattern. O The data appear to follow a cyclical pattern. Month 1 2 (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 3 4 5 6 7 9.6 9.4 9.5 9.6 9.9 8 9 10 11 12 9.6 9.4 9.5 9.6 9.9 9.7 9.8 10.5 10.0 9.7 9.8 9.8 9.6 9.6 r [ C C C C C r r 1 7 ]] 7 7 10.5 10.0 9.8 9.6 9.6 7 7 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 11.0 T 10.5- 10.0+ 9.5 9.0 8.5 0:3 8.0 0.0 7.5 7.0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Month DO 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 Q

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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.
The three-month moving average provides more accurate forecasts, because its MSE is larger than that of the four-month moving
average.
The four-month moving average provides more accurate forecasts, because its MSE is smaller than that of the three-month moving
average.
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. The three-month moving average provides more accurate forecasts, because its MSE is larger than that of the four-month moving average. The four-month moving average provides more accurate forecasts, because its MSE is smaller than that of the three-month moving average. 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.
ܚܝܩܘܐܬܐ ܘܟܘܐܢܐ ܒܘܬܐ
1
2
3
4
5
6
7
9.6 9.4 9.5 9.6 9.9 9.7 9.8 10.5 10.0 9.8
8
11.0 T
9
10.5
What type of pattern exists in the data?
O The data appear to follow a trend pattern.
O The data appear to follow a seasonal pattern.
O The data appear to follow a horizontal pattern.
O The data appear to follow a cyclical pattern.
Month
10.0+
11
10
9.5
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
(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
9.6
9.4
9.5
9.6
9.9
9.7
9.8
10.5
10.0
9.8
Month
9.6
9.6
11.01
10.5
10.0+
9.5
9.0-
8.5+
8.0
7.5-
9.6 9.6
7.0
0 1 2 3 4 5 6 7 8 9 10 11 12 13
Month
O
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
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
Ⓡ
Transcribed Image Text:Corporate triple-A bond interest rates for 12 consecutive months follow. (a) Construct a time series plot. ܚܝܩܘܐܬܐ ܘܟܘܐܢܐ ܒܘܬܐ 1 2 3 4 5 6 7 9.6 9.4 9.5 9.6 9.9 9.7 9.8 10.5 10.0 9.8 8 11.0 T 9 10.5 What type of pattern exists in the data? O The data appear to follow a trend pattern. O The data appear to follow a seasonal pattern. O The data appear to follow a horizontal pattern. O The data appear to follow a cyclical pattern. Month 10.0+ 11 10 9.5 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 (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 9.6 9.4 9.5 9.6 9.9 9.7 9.8 10.5 10.0 9.8 Month 9.6 9.6 11.01 10.5 10.0+ 9.5 9.0- 8.5+ 8.0 7.5- 9.6 9.6 7.0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Month O 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 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 Ⓡ
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