TripleABond.xlsx. The corporate triple A bond interest rates for 12 consecutive months are given in the file. a. Construct a time series plot. What type of pattern exists in the data? b. Develop 3-month and 4-month averages for this data. Does the 3-month or 4- month moving average provide the better forecasts based on MSE? Explain. c. What is the moving average forecast for the next month? 4. Consider the following time series: Quarter Year 1 Year 2 Year 3 71 68 62 2 49 41 51 58 53 78 81 72 a. Construct a time-series plot. What type of pattern exists in the data? Is there an indication of a seasonal pattern? b. Use multiple linear regression model with dummy variables as follows to develop an equation to account for seasonal effects in the data. Qtr1 = 1 if quarter 1, 0 else; Qtr2 = 1 if quarter 2, 0 else; Qtr3 = 1 if quarter 3, 0 else. c. Compute the quarterly forecasts for next year.
TripleABond.xlsx. The corporate triple A bond interest rates for 12 consecutive months are given in the file. a. Construct a time series plot. What type of pattern exists in the data? b. Develop 3-month and 4-month averages for this data. Does the 3-month or 4- month moving average provide the better forecasts based on MSE? Explain. c. What is the moving average forecast for the next month? 4. Consider the following time series: Quarter Year 1 Year 2 Year 3 71 68 62 2 49 41 51 58 53 78 81 72 a. Construct a time-series plot. What type of pattern exists in the data? Is there an indication of a seasonal pattern? b. Use multiple linear regression model with dummy variables as follows to develop an equation to account for seasonal effects in the data. Qtr1 = 1 if quarter 1, 0 else; Qtr2 = 1 if quarter 2, 0 else; Qtr3 = 1 if quarter 3, 0 else. c. Compute the quarterly forecasts for next year.
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
Transcribed Image Text:TripleABond.xlsx. The corporate triple A bond interest rates for 12 consecutive months
are given in the file.
a. Construct a time series plot. What type of pattern exists in the data?
b. Develop 3-month and 4-month averages for this data. Does the 3-month or 4-
month moving average provide the better forecasts based on MSE? Explain.
c. What is the moving average forecast for the next month?
4. Consider the following time series:
Quarter
Year 1
Year 2
Year 3
71
68
62
2
49
41
51
58
53
78
81
72
a. Construct a time-series plot. What type of pattern exists in the data? Is there an
indication of a seasonal pattern?
b. Use multiple linear regression model with dummy variables as follows to develop
an equation to account for seasonal effects in the data. Qtr1 = 1 if quarter 1, 0 else; Qtr2
= 1 if quarter 2, 0 else; Qtr3 = 1 if quarter 3, 0 else.
c. Compute the quarterly forecasts for next year.
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