If the units for Rate are the number of SAUDI Riyal to one Euro as follow:

Year Month Rate: 2007 October 7.50

2007 November 7.42

2007 December 7.37

2008 January 7.24

2008 February 7.16

2008 March 7.07

2008 April 7.00

2008 May 6.97

2008 June 6.89

2008 July 6.84

a. Use simple linear regression analysis to find the parameters for the line that minimizes MSE for this time series.

b. Use the resulting equation from your answers to forecast the exchange rate for August and September 2008.

c. Would you feel comfortable using the trend equation to forecast the exchange rate for December 2008? Find this value?