Omar has invested in a stock mutual fund and he is considering liquidating and investing in...

 

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Omar has invested in a stock mutual fund and he is considering liquidating and investing in a bond fund. He would like to forecast the price of the stock fund for the next month before making a decision. He has collected the following data on the average price of the fund during the past 5 months. Month 1 2 3 4 5 Fund price 52 56 62 59 65 1. Using a three-month moving average, forecast the fund price for months 5 and 6. 2. Using a three-month weighted average with the most recent month weighted 0.60, the next most recent month weighted 0.30, and the third month weighted 0.10, forecast the fund price for months 5 and 6. 3. Compute an exponentially smoothed forecast using a = 0.40 and forecast the fund price for months 5 and 6. We will consider that F4= 57. 4. Knowing that the Fund price for month 6 is equal to 70 (D6 = 70), compare the forecasts in (a) and (b) using MAD and indicate the most accurate. Omar has invested in a stock mutual fund and he is considering liquidating and investing in a bond fund. He would like to forecast the price of the stock fund for the next month before making a decision. He has collected the following data on the average price of the fund during the past 5 months. Month 1 2 3 4 5 Fund price 52 56 62 59 65 1. Using a three-month moving average, forecast the fund price for months 5 and 6. 2. Using a three-month weighted average with the most recent month weighted 0.60, the next most recent month weighted 0.30, and the third month weighted 0.10, forecast the fund price for months 5 and 6. 3. Compute an exponentially smoothed forecast using a = 0.40 and forecast the fund price for months 5 and 6. We will consider that F4= 57. 4. Knowing that the Fund price for month 6 is equal to 70 (D6 = 70), compare the forecasts in (a) and (b) using MAD and indicate the most accurate.