Chapter 14.5, Problem 7SE

a.

To determine

Construct Excel line graph for the bond yield data.

Identify the pattern.

Check whether there is a consistent trend or not.

b.

To determine

Record the statistics of fit using both methods A and B for initializing the forecasts by using exponential smoothing with $\alpha =0.20$ using one of the software’s MegaStat, MINITAB or Excel.

c.

To determine

Make exponential smoothing for $\alpha =0.10\text{ and 0}\text{.30}$ by using both methods A and B for initializing the forecast and record the statistics of fit using one of the software’s MegaStat, MINITAB or Excel.

d.

To determine

Compare the statistics of fit for the values of $\alpha =0.10,0.20\text{ and }0.30$.

e.

To determine

Make a forecast for one period $\left(t=53\right)$ by using $\alpha =0.10,0.20\text{ and }0.30$.

Explain the way of the values of $\alpha$ affecting the forecast.