1.A State University Credit Union handles saving accounts and makes loans to members. In order to plan its investment strategies, the credit union needs to forecast monthly loan requests. Monthly Loan requests were recorded for the last 25 monthsand are presented in the table at the bottom of this page.Answer the following questions

b.Use the Holts approach.

1. Pretend that only the first 4 data points were collected. You need to determine F(4+1), F(4+2), and F(4+3). With alpha = 0.55, and gamma = 0.22 make these forecasts.Perform all the steps needed based on Holts, and show your work

2. Since management needs to plan the loan funds availability based on loan request forecasts, it wants the best Holts model. Determine the best performing Holts model based on MSE. Use the Data Table Excel tool (use increments of 0.1 for alpha and gamma)

3. As a matter of policy,management will approve requestsfor loans up to a total of $1,900,000 a month (which, in our data set, will be a value of1900since the data appear in thousands).For each of the next three months (t=26, 27, 28) how confident canthe bank be all the loan requests will be approvedby the bank(provide the largest confidence possible in each month? There may be different confidence levels among themonths.Usethe model you found in question b(ii) above (that is, the optimal model). You can use trial and error with the template, or goal seek.If your search use up to three decimal digits (for example, 0.755).

Month 1 2 3 4 5 6 7 8 9 10 11 12 13 o ovo AWN- Loan Requests Month 1156 14 1101 15 1195 16 1072 17 1237 18 1106 19 1148 20 1005 21 1350 1115 23 1196 24 1298 1260 Loan Requests 1264 1235 1357 1373 1358 1489 1428 1516 1681 1598 1699 1781 22 25 Month 1 2 3 4 5 6 7 8 9 10 11 12 13 o ovo AWN- Loan Requests Month 1156 14 1101 15 1195 16 1072 17 1237 18 1106 19 1148 20 1005 21 1350 1115 23 1196 24 1298 1260 Loan Requests 1264 1235 1357 1373 1358 1489 1428 1516 1681 1598 1699 1781 22 25