Teachers' Retirement System of the City of New York offers several types of investments for its members.
Question:
For each of the two time series,
a. Plot the data.
b. Compute the linear trend forecasting equation.
c. Compute the quadratic trend forecasting equation.
d. Compute the exponential trend forecasting equation.
e. Determine the best-fitting autoregressive model, using α = 0.05.
f. Perform a residual analysis for each of the models in (b) through (e).
g. Compute the standard error of the estimate (Syx) and the MAD for each corresponding model in (f).
h. On the basis of your results in (f) and (g), along with a consideration of the principle of parsimony, which model would you select for purposes of forecasting? Discuss.
i. Using the selected model in (h), forecast the unit values for 2011.
j. Based on the results of (a) through (i), what investment strategy would you recommend for a member of the Teachers' Retirement System of the City of New York? Explain.
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Related Book For
Basic Business Statistics Concepts And Applications
ISBN: 9780132168380
12th Edition
Authors: Mark L. Berenson, David M. Levine, Timothy C. Krehbiel
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