For the data in Problem 5-42, develop an exponential smoothing model with a smoothing constant of 0.3.

Question:

For the data in Problem 5-42, develop an exponential smoothing model with a smoothing constant of 0.3. Using the MSE, compare this with the model in Problem 5-42.
In Problem 5-42, The following table gives the average monthly between the U.S. dollar and the euro for 2009. It shows that 1 euro was equivalent to 1.289 U. S. dollars in January 2009. Develop a trend line that could be used to predict the for 2010. Use this model to predict the for January 2010 and February 2010.
Month
January ............ 1.289
February .......... 1.324
March ........... 1.321
April ............. 1.317
May ............. 1.280
June ............. 1.254
July ............. 1.230
August ........... 1.240
September ......... 1.287
October .......... 1.298
November ......... 1.283
December ......... 1.311

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...