Chapter 16, Problem 6PS

How have stocks performed in the past? The following table presents the data stored in Stock Performance, which show the performance of a broad measure of stock performance (by percentage (by per percentage) for each decade from the 1830s through the 2000s:

a. Plot the time series.

b. Fit a three-period moving average to the data and plot the results.

c. Using a smoothing coefficient of $W=0.50,$ exponentially smooth the series and plot the results.

d. What is your exponentially smoothed forecast for the 2010s?

e. Repeat (c) and (d), using $W=0.25,$

f. Compare the results of (d) and (e).

g. What conclusions can you reach concerning how stock have performed in the past?