For data of weekly returns (in %) of Google stock given here, forecast the return for the week of March 5, 2017 as follows.

[Note: Express your forecasts in % rounded to to 2 decimal places (e.g., 3.23%), and

express the MSE's rounded to 5 decimal places (e.g., 0.00073).]

(a) Use a 3-week moving average and find the MSE form this.

(b) Use exponential smoothing with alpha value = 0.3.

(c) Now using the Data Table, perform exponential smoothing with alpha value = 0.1, 0.2, 0.3, 0.4, 0.5, 0.6, 0.7, 0.8, 0.9. Choose the alpha with the smallest MSE. What is the best forecast here and the corresponding alpha?

(d) Which method is better between (a) 3-week mov. ave. and (c) expo smoothing with the best alpha? Show MSEs to support your answer.

Expo. Smoothing Data Table Expo Alpha Forecast MSE Squared Smoothing Squared 3-week Mov. Ave. Error 0.3 Error 7 Week of Retum 0.45% 2.68% -0.50% 4.19% -1.05% 0.86% 0.15% -1.47% 5.17% 0.19% -0.11% -2.29% 4.45% 0.21% -0.35% 2.27% -2.65% 1.52% 1.77% 0.07% 0.80% 10/10/16 10/17/16 10/24/16 10/31/16 10 12 13 14 15 16 17 18 19 20 21 11/14/16 11/21/16 11/28/16 12/5/16 12/12/16 12/19/16 12/27/16 1/23/17 1/30/17 23 24 25 26 27 28 29 30 31 32 MSE 2/21/17 2/27/17 3/5/17? Expo. Smoothing Data Table Expo Alpha Forecast MSE Squared Smoothing Squared 3-week Mov. Ave. Error 0.3 Error 7 Week of Retum 0.45% 2.68% -0.50% 4.19% -1.05% 0.86% 0.15% -1.47% 5.17% 0.19% -0.11% -2.29% 4.45% 0.21% -0.35% 2.27% -2.65% 1.52% 1.77% 0.07% 0.80% 10/10/16 10/17/16 10/24/16 10/31/16 10 12 13 14 15 16 17 18 19 20 21 11/14/16 11/21/16 11/28/16 12/5/16 12/12/16 12/19/16 12/27/16 1/23/17 1/30/17 23 24 25 26 27 28 29 30 31 32 MSE 2/21/17 2/27/17 3/5/17