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E Year G H M Time Series plot of quarterly light rail usage (first quarter 2009 through first quarter 2014) 140000 135000 Quarter t 2009
E Year G H M Time Series plot of quarterly light rail usage (first quarter 2009 through first quarter 2014) 140000 135000 Quarter t 2009 1 2 3 4 2010 1 2 3 4 2011 1 2 3 4 2012 1 2 3 130000 y(t) 1 110569 2 113433 3 118183 4 114932 5 112337 6 117224 7 118863 8 116554 9 116287 10 124077 11 126540 12 123559 13 1226074 14 129549.7 15 128105.9 16 126818.9 17 123020.3 18 130158.9 19 133584.3 20 132147.9 21 126932.4 Passengers (thousands) 125000 120000 115000 110000 0 5 18 21 24 9 12 15 Time (quarters) 4 2013 1 5 6 7 8 9 20 21 22 3 1 2 3 2014 1 2. Even though the moving averages help highlight the long-run trend of a time series, the moving average model is not designed for making forecasts in the presence of trends. Explain the reason why we should not rely on moving averages for predicting future observations of a trending series. (10p)
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