Question
Corporate Triple A bond interest rates for 12 consecutive months are 9.5, 9.3, 9.4, 9.6,9.8, 9.7, 9.8, 10.5, 9.9, 9.7, 9.6, and 9.6.a.(10 points) Use
Corporate Triple A bond interest rates for 12 consecutive months are 9.5, 9.3, 9.4, 9.6,9.8, 9.7, 9.8, 10.5, 9.9, 9.7, 9.6, and 9.6.a.(10 points) Use a weight of 1/2 for the most recent observation, 1/3 for the secondmost recent, and 1/6 for the third most recent to compute a 3-month weighted movingaverage for the time series.b. (10 points) Compute the MSE for the weighted moving average in part (a).Now, calculate the un-weighted moving average and the corresponding MSE. Whichmethod do you prefer: the un-weighted or weighted from part a) and why?c. (10 points) Use exponential smoothing with ?=0.35 Calculate the MSE.
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