Corporate triple-A bond interest rates for 12 consecutive months follow.

9.5

9.4

9.4

9.7

9.8

9.7

9.9

10.6

10.0

9.8

9.6

9.6

(a)

Construct a time series plot.

What type of pattern exists in the data?

The data appear to follow a seasonal pattern.

The data appear to follow a trend pattern.

The data appear to follow a cyclical pattern.

The data appear to follow a horizontal pattern.

(b)

Develop three-month and four-month moving averages for this time series. (Round your answers to two decimal places.)

Month	Time Series Value	3-Month Moving Average Forecast	4-Month Moving Average Forecast
1	9.5
2	9.4
3	9.4
4	9.7
5	9.8
6	9.7
7	9.9
8	10.6
9	10.0
10	9.8
11	9.6
12	9.6

Does the three-month or four-month moving average provide more accurate forecasts based on MSE? Explain.

The four-month moving average provides more accurate forecasts, because its MSE is smaller than that of the three-month moving average.

The three-month moving average provides more accurate forecasts, because its MSE is smaller than that of the four-month moving average.

The three-month moving average provides more accurate forecasts, because its MSE is larger than that of the four-month moving average.

The four-month moving average provides more accurate forecasts, because its MSE is larger than that of the three-month moving average.

(c)

Using the more accurate approach, what is the moving average forecast for the next month? (Round your answer to two decimal places.)