Question: Question 1 The yield on a city bond fluctuates with the market. The monthly quotations for January- June 2017 are given in Table 1-1. Table

Question 1 The yield on a city bond fluctuates with the market. The monthly quotations for January- June 2017 are given in Table 1-1. Table 1-1: Monthly yield on the city bond for 2017 Month Yield January 9.29 February 9.99 March 10.16 April 10.25 May 10.61 June 11.07 (a) Forecast the monthly yield for the bond, starting from April, using a three-month moving average. (7 marks) (b) Forecast the monthly yield for the bond, starting from June, using a five-month moving average. (5 marks) (c) Evaluate the two (2) forecasting methods using the MAPE (minimum absolute percentage error). (8 marks)

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