In order to forecast the stock price of Google, a financial analyst used two different forecasting methods: an ARIMA method, and a GARCH method. The results are summarized in the following table: ARIMA Method Year Actual Value Forecast Value Year 2021 2021 2022 2022 2023 2023 100 110 115 98 105 118 GARCH Method Actual Value 100 110 115 For each method compute the following accuracy measures: 1. Mean square error (MSE) 2. Root-Mean-Squared Error (RMSE). Which forecasting method would you recommend? Why? Forecast Value 99 104 116

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In order to forecast the stock price of Google, a financial analyst used two different
forecasting methods: an ARIMA method, and a GARCH method. The results are
summarized in the following table:
ARIMA Method
Year Actual Value Forecast Value Year
2021
2021
2022
2022
2023
2023
100
110
115
98
105
118
GARCH Method
Actual Value Forecast Value
100
110
115
For each method compute the following accuracy measures:
1. Mean square error (MSE)
2. Root-Mean-Squared Error (RMSE).
Which forecasting method would you recommend? Why?
99
104
116
Transcribed Image Text:In order to forecast the stock price of Google, a financial analyst used two different forecasting methods: an ARIMA method, and a GARCH method. The results are summarized in the following table: ARIMA Method Year Actual Value Forecast Value Year 2021 2021 2022 2022 2023 2023 100 110 115 98 105 118 GARCH Method Actual Value Forecast Value 100 110 115 For each method compute the following accuracy measures: 1. Mean square error (MSE) 2. Root-Mean-Squared Error (RMSE). Which forecasting method would you recommend? Why? 99 104 116
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