Question $10(3$ points$)$

Consider your work on the question about student loan debt $($Handout problem $4\mathrm{.}4).$

Reflect on this work and choose the answer that best describes your calculations.

The Moving average model is the best model for these data because it is able to

smooth peaks and valleys in otherwise steady data. In this case the data is

relatively steady, making the moving average ideal,

Of the three choices in this problem, the Naive model is the best model for these

data. It has the lowest error and seems to be the only of these three models

able to quickly adapt to rapidly growing demand for student loans.

While the Naive model has the lowest MAD, making it the mathematically best

model, it may not be the best choice. In this case the extremely low smoothing

constant makes the exponential smoothing model adaptive over time. Thus, the

exponential smoothing model is the best model for quickly increasing data.

The Naive model is by far the easiest model, and has the lowest MAD, so it

should always be used regardless of the other models available. Since student

loan data is not rising very quickly, this is the idea model.