Question: As the worlds economy becomes increasingly interdependent, various exchange rates between currencies have become important in making business decisions. For many U.S. businesses, the Japanese
As the world’s economy becomes increasingly interdependent, various exchange rates between currencies have become important in making business decisions. For many U.S. businesses, the Japanese exchange rate (in yen per U.S. dollar) is an important decision variable. This exchange rate (EXRJ) is shown in the following table by month for a two-year period:
Period…………....EXRJ
1…………………127.36
2…………………127.74
3…………………130.55
4…………………132.04
5…………………137.86
6…………………143.98
7…………………140.42
8………………...141.49
9………………...145.07
10…………….…142.21
11……………….143.53
12……………….143.69
13……………….144.98
14……………….145.69
15……………….153.31
16……………….158.46
17……………….154.04
18………………...153.7
19……………….149.04
20……………….147.46
21……………….138.44
22……………….129.59
23……………….129.22
24……………….133.89
Prepare a time-series plot of this series, and use the naive forecasting model to forecast EXRJ for each month from year 1 M2 (February) through year 3 M1 (January).
Calculate the MAPE for the period from year 1 M2 through year 2 M12.
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Period EXRJ Nave Forecast 1 12736 2 12774 12736 3 13055 12774 4 13204 13055 5 13786 13204 6 14398 13... View full answer
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