Consider the following table, which lists a portion of the monthly unemployment rates (seasonally adjusted) in California from 2007-2010.

Year.......... Month......... Unemployment Rate (%)

2007.............. Jan.................................... 4.9

2007.............. Feb.................................... 5.0

⋮............................ ⋮......................................................⋮

2010............. Dec.................................... 12.5

a. Plot the above series. Which polynomial trend model do you think is most appropriate?

b. Verify your answer by formally comparing the linear, the quadratic, and the cubic trend models.

c. Forecast the unemployment rate in California for January 2011.