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 loans requests. Monthly Loan requests in millions of dollars were recorded for the last two years and are presented in the data set at the last page. Answer the following questions:

1.Here you need to show your familiarity with the exponential smoothing forecast calculations, and the calculation of MAE. The first four data points were separated from the rest of the time series. Pretend this is now the only sample you have available (Y1 = 1.34, Y2 = 1.5, Y3 = 1.48, Y4 = 1.78).

(i)Show how you would calculate F₃₊₁, F₄₊₁, andF₄₊₃for the reduced time series of Y1, Y2, Y3, and Y4, using the Expon. Smooth. with alpha = 0.6

(ii)Show how you would calculate MAE for the reduced sample shown above, when using the forecasts you calculated in part (i).

This is the time series: Copy and paste the values into your template (you can copy all the column as one selection. Don't copy the 't' column)

1.34

1.5

1.48

1.78

1.59

1.5

1.42

1.85

1.77

1.52

1.42

1.41

1.58

1.31

1.55

1.39

1.45

1.74

1.68

1.38

1.45

1.43

1.43

1.48