Investors are always reviewing past pricing history and using it to influence their future investment decisions. On

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Investors are always reviewing past pricing history and using it to influence their future investment decisions. On May 16, 2014, online car buying system TrueCar launched its initial public offering (IPO), raising $70 million in the stock offering. An investor, looking for a promising return, analyzes the monthly stock price data of TrueCar from June 2014 to May 2017. A portion of the data is shown in the accompanying table.

Date Price Jun-14 14.78 13.57 Jul-14 May-17 17.51


a. Plot the stock price data with superimposed linear, quadratic, and cubic trends. Which trend do you think describes the data best?

b. Estimate the linear, the quadratic, and the cubic trend models.

c. Use the preferred model to make a forecast for June 2017.

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