
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Question
Corporate triple-A bond interest rates for 12 consecutive months are as follows.
9.5 | 9.4 | 9.5 | 9.7 | 9.8 | 9.8 | 9.9 | 10.6 | 10.0 | 9.8 | 9.7 | 9.7 |
(a)
Construct a time series plot. What type of pattern exists in the data?
The data appear to follow a trend pattern.The data appear to follow a horizontal pattern. The data appear to follow a seasonal pattern.The data appear to follow a cyclical pattern.
(b)
Develop three-month and four-month moving averages for this time series. (Round your answers to two decimal places.)
Month | Time Series Value |
3-Month Moving Average |
4-Month Moving Average Forecast |
---|---|---|---|
1 | 9.5 | ||
2 | 9.4 | ||
3 | 9.5 | ||
4 | 9.7 | ||
5 | 9.8 | ||
6 | 9.8 | ||
7 | 9.9 | ||
8 | 10.6 | ||
9 | 10.0 | ||
10 | 9.8 | ||
11 | 9.7 | ||
12 | 9.7 |
Does the three-month or four-month moving average provide the better forecasts based on MSE? Explain.
The four-month moving average provides more accurate forecasts, because its MSE is smaller than that of the three-month moving average.The three-month moving average provides more accurate forecasts, because its MSE is smaller than that of the four-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.The three-month moving average provides more accurate forecasts, because its MSE is larger than that of the four-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.)
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