Question: 16.14 The data file High Yield Index contains the time series of the percent yield on bonds issued by European corporations. This yield is a

16.14 The data file High Yield Index contains the time series of the percent yield on bonds issued by European corporations. This yield is a measure of the return to investors of investing in these bonds.

a. Using smoothing constants a = 0.2, 0.4, 0.6, 0.8, find forecasts of the high yield index based on simple exponential smoothing.

b. Which of the forecasts would you choose to use?

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