FOR4. The Excel file Unemployment Rates provides data on monthly rates for 4 years. (8 pts)

a. Develop 3- and 6-months moving average forecasts, and exponential smoothing forecasts (use alpha of your choice)

b. Using MAD as a criterion, explain which model yields better forecast?

DATA:

Unemployment Rates
Year	Month	Rate (%)
2009	Jan	7.8
2009	Feb	8.3
2009	Mar	8.7
2009	Apr	9.0
2009	May	9.4
2009	Jun	9.5
2009	Jul	9.5
2009	Aug	9.6
2009	Sep	9.8
2009	Oct	10.0
2009	Nov	9.9
2009	Dec	9.9
2010	Jan	9.8
2010	Feb	9.8
2010	Mar	9.9
2010	Apr	9.9
2010	May	9.6
2010	Jun	9.4
2010	Jul	9.5
2010	Aug	9.5
2010	Sep	9.5
2010	Oct	9.5
2010	Nov	9.8
2010	Dec	9.3
2011	Jan	9.1
2011	Feb	9.0
2011	Mar	8.9
2011	Apr	9.0
2011	May	9.0
2011	Jun	9.1
2011	Jul	9.0
2011	Aug	9.0
2011	Sep	9.0
2011	Oct	8.9
2011	Nov	8.6
2011	Dec	8.5
2012	Jan	8.3
2012	Feb	8.3
2012	Mar	8.2
2012	Apr	8.1
2012	May	8.2
2012	Jun	8.2
2012	Jul	8.2
2012	Aug	8.1
2012	Sep	7.8
2012	Oct	7.9
2012	Nov	7.8
2012	Dec	7.8