F I L E Consider the following sample data, consisting of 20 observations. The data are also on the text website, labeled Exercise 18.4.

t 1 2 3 4 5 6 7 8 9 10 yt 14 17 12 16 18 16 15 19 23 23 t 11 12 13 14 15 16 17 18 19 20 yt 18 19 19 21 21 25 23 26 23 20

a. Use the 3-period moving average to make forecasts and compute the resulting MSE and MAD.

b. Use the exponential smoothing method to make forecasts with α = 0.4. Compute the resulting MSE and MAD.

c. Use the preferred method to make a forecast for period 21.

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