Question: Using the DJIA data in Problem 5-39, use exponential smooth with trend adjustment to forecast the opening DJIA value for 2014. Use α = 0.8

Using the DJIA data in Problem 5-39, use exponential smooth with trend adjustment to forecast the opening DJIA value for 2014. Use α = 0.8 and β = 0.2. Compare the MSE for this technique with the MSE for the trend line.
In Problem 5-39, The following table provides the Dow Jones Industrial Average (DJIA) opening index value on the first working day of 1994€“2013: Develop a trend line and use it to predict the opening DJIA index value for years 2014, 2015, and 2016. Find the MSE for thismodel.
Using the DJIA data in Problem 5-39, use exponential smooth

YEAR DJIA | YFAR DJIA 8,342 2013 2012 2011 13,104 12,392 11,577 2003 2002 022 10,791 11502 9.213 7.908 6.448 5,117 3.834 3.754 2001 2010 10431 2000 2009 2008 2007 2006 2005 8,772 13,262 12.460 10,718 10,784 1999 1998 1997 1996 1995 2004 10,4531994 3.74

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Using QM for Windows the forecast is 13401800 and the MSE 2867351 ignoring the firs... View full answer

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