Statistics for Management and Economics (Book Only)
11th Edition
ISBN: 9781337296946
Author: Gerald Keller
Publisher: Cengage Learning
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Chapter 20.4, Problem 30E
To determine
Calculation of MAD and SSE.
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A researcher has a sample of 6 annual observations {94, 104, 102, 99, 111 and 107} for the CPI in country Z for the period 2015 to 2020, and wants to forecast CPI for the years 2021, 2022 and 2023. The researcher uses 3 different forecasting models: A, B and C. Model A is an AR(1) model with no drift and with an estimated autoregressive coefficient = 0.7. Model B is a MA(1) model with no constant and with an estimated MA coefficient = -0.4 (note the minus !). Model C is a random walk model with no drift. The error terms over the 2015-2020 period were estimated to have the values: {3, -1, 2, 4, -3, 1}.
a. Compute the 2021, 2022 and 2023 forecasted values for the consumer price index based on the three models. Show the formulas and the details of your calculations, and explain all the related symbols.
b. Suppose that the actual values of the CPI over the 2021, 2022 and 2023 were {108, 114, 105}. Calculate the Root mean square error of the three model forecasts over the 2021-2023…
Comprehensively state the criteria and process of selecting appropriate models for time series forecasting.
Final answer is 2689822..please show calculation
Chapter 20 Solutions
Statistics for Management and Economics (Book Only)
Ch. 20.2 - Prob. 1ECh. 20.2 - Prob. 2ECh. 20.2 - Prob. 3ECh. 20.2 - Prob. 4ECh. 20.2 - Prob. 5ECh. 20.2 - Prob. 6ECh. 20.2 - Prob. 7ECh. 20.2 - Prob. 8ECh. 20.2 - Prob. 9ECh. 20.2 - Prob. 10E
Ch. 20.2 - Prob. 11ECh. 20.2 - Prob. 12ECh. 20.2 - Prob. 13ECh. 20.2 - Prob. 14ECh. 20.2 - Prob. 15ECh. 20.2 - Prob. 16ECh. 20.2 - Prob. 17ECh. 20.3 - Prob. 18ECh. 20.3 - Prob. 19ECh. 20.3 - Prob. 20ECh. 20.3 - Prob. 21ECh. 20.3 - Prob. 22ECh. 20.3 - Prob. 23ECh. 20.3 - Prob. 24ECh. 20.3 - Prob. 25ECh. 20.3 - Prob. 26ECh. 20.3 - Prob. 27ECh. 20.3 - Prob. 28ECh. 20.3 - Xr20-29 A manufacturer of ski equipment is in the...Ch. 20.4 - Prob. 30ECh. 20.4 - Prob. 31ECh. 20.4 - Prob. 32ECh. 20.4 - Prob. 33ECh. 20.5 - Prob. 34ECh. 20.5 - Prob. 35ECh. 20.5 - Prob. 36ECh. 20.5 - Prob. 37ECh. 20.5 - Prob. 38ECh. 20.5 - Prob. 39ECh. 20.5 - Prob. 40ECh. 20.5 - Prob. 41ECh. 20.5 - Prob. 42ECh. 20.5 - Prob. 43ECh. 20.5 - Prob. 44ECh. 20.5 - Prob. 45ECh. 20.5 - Prob. 46ECh. 20.5 - Prob. 47ECh. 20.5 - Prob. 48ECh. 20.5 - Prob. 49ECh. 20.5 - Prob. 50ECh. 20.5 - Prob. 51ECh. 20.5 - Prob. 52E
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