Data for Question 3 Unemployment Rate (%) Year 1 6.3 Year 2 6 Year 3 6.1 Year 4 8.3 Year 5 8.1 Year 6 7.5 Year 7 7.3 Year 8 7.1 Year 9 6.9 Year 10 6.9 Year 11 7Topic: Forecasting Models: Moving Average, Weighed Moving Average, and Espertemiaf Smoothing Question 3 (10 marks) The unemployment rates in Canada during a 11-year period are shown in the Data for Question 3 tab in the Excel le. a) Find 5-year moving averages for year 6 through year 12. What is the forecast for the unemployment rate in Year 12'? [2] h) Find weighted moving averages with three periods for year 4 through year 12. What is the forecast for the unemployment rate in Year 12'? Assume that the data value in the most recent year is given a weight of 3 and data value in the second most recent year are given a weight of 1 and the data in the third most recent year are given a weight of 1. [3] c) Use exponential smoothing with a smoothing constant a = 0.4 to develop forecasts for year 2 through year 12. What is the forecast for the unemployment rate in Year 12'? Assume that the initial forecast for Year 1 is T.l(%). [3] d) Report the Mean Absolute Deviation MAD) for each model (in part a), part b) and part c)). Based on MAD criteria, which model would he more accurate in predicting the unemployment rate for Year 12'? Why? [2]