Consider the following trend models estimated from 30 observations Linear Model 24 0 12t Quadratic Model 2 30 0 20t 0 01t 2 a Use each model to make a forecast for y at t 31 and t 32 b Which is the preferred model for forecasting if, relative to the linear model, the quadratic model has higher R 2 ...

a b The linear model is preferred because i ...

Consider the following trend models estimated from 30 observations. Linear Model: = 24 + 0.12t Quadratic

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Consider the following trend models estimated from 30 observations.

Linear Model: ŷ = 24 + 0.12t

Quadratic Model 2: ŷ = 30 + 0.20t − 0.01t²

a. Use each model to make a forecast for y at t = 31 and t = 32.

b. Which is the preferred model for forecasting if, relative to the linear model, the quadratic model has higher R² but lower adjusted R²?

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Business Statistics Communicating With Numbers

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Authors: Sanjiv Jaggia, Alison Kelly

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Consider the following trend models estimated from 30 observations. Linear Model: = 24 + 0.12t Quadratic

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Business Statistics Communicating With Numbers

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