Applied Statistics in Business and Economics
5th Edition
ISBN: 9781259329050
Author: DOANE
Publisher: MCG
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Chapter 14, Problem 12CR
a.
To determine
Explain two ways to initialize the forecasts in an exponential smoothing process.
b.
To determine
Write an advantage and disadvantage of each method.
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When considering the future performance of a company, financial analysts often use forecasts for earnings per share (EPS). Naturally, we are interested in the quality of these forecasts. We can define a forecasting error as follows:
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The November 24, 2001, issue of The Economist published economic data for 15
industrialized nations. Included were the percent changes in gross domestic product (GDP),
industrial production (IP), consumer prices (CP), and producer prices (PP) from Fall 2000
to Fall 2001, and the unemployment rate in Fall 2001 (UNEMP). An economist wants to
construct a model to predict GDP from the other variables. A fit of the model
GDP = , + P,IP + 0,UNEMP + f,CP + P,PP + €
yields the following output:
The regression equation is
GDP = 1.19 + 0.17 IP + 0.18 UNEMP + 0.18 CP – 0.18 PP
Predictor
Coef SE Coef
тР
Constant
1.18957 0.42180 2.82 0.018
IP
0.17326 0.041962 4.13 0.002
UNEMP
0.17918 0.045895 3.90 0.003
CP
0.17591 0.11365 1.55 0.153
PP
-0.18393 0.068808 -2.67 0.023
Predict the percent change in GDP for a country with IP = 0.5, UNEMP = 5.7, CP =
3.0, and PP = 4.1.
a.
b.
If two countries differ in unemployment rate by 1%, by how much would you predict
their percent changes in GDP to differ, other…
Chapter 14 Solutions
Applied Statistics in Business and Economics
Ch. 14.2 - Prob. 2SECh. 14.2 - Prob. 3SECh. 14.2 - Prob. 4SECh. 14.2 - Prob. 5SECh. 14.4 - (a) Make an Excel line graph of the exchange rate...Ch. 14.5 - Prob. 7SECh. 14 - Explain the difference between (a) stocks and...Ch. 14 - (a) What is periodicity? (b) Give original...Ch. 14 - (a) What are the distinguishing features of each...Ch. 14 - Name four criteria for assessing a trend forecast.
Ch. 14 - Name two advantages and two disadvantages of each...Ch. 14 - When would the exponential trend model be...Ch. 14 - Explain how to obtain the compound percent growth...Ch. 14 - (a) When might a quadratic model be useful? (b)...Ch. 14 - Name five measures of fit for a trend, and state...Ch. 14 - Prob. 10CRCh. 14 - Prob. 11CRCh. 14 - Prob. 12CRCh. 14 - (a) Why is seasonality irrelevant for annual data?...Ch. 14 - Prob. 14CRCh. 14 - (a) Explain how seasonal binaries can be used to...Ch. 14 - What is the purpose of index numbers?Ch. 14 - Prob. 10CECh. 14 - Prob. 11CECh. 14 - Prob. 12CECh. 14 - Prob. 14CECh. 14 - Prob. 15CECh. 14 - Prob. 16CECh. 14 - Prob. 17CECh. 14 - Prob. 18CECh. 14 - Prob. 19CECh. 14 - Prob. 20CECh. 14 - Prob. 21CECh. 14 - Prob. 22CECh. 14 - (a) Plot the data on skier/snowboard visits. (b)...Ch. 14 - Prob. 25CECh. 14 - (a) Use Excel, MegaStat, or MINITAB to fit an...Ch. 14 - Prob. 27CECh. 14 - Prob. 28CECh. 14 - Prob. 29CECh. 14 - Prob. 30CECh. 14 - (a) Plot the data on revolving credit (credit...
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