Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Omar has invested in a stock mutual fund and he is considering liquidating and investing in a bond fund. He would like to forecast

 

Omar has invested in a stock mutual fund and he is considering liquidating and investing in a bond fund. He would like to forecast the price of the stock fund for the next month before making a decision. He has collected the following data on the average price of the fund during the past 5 months. Month 1 2 3 4 5 Fund price 52 56 62 59 65 1. Using a three-month moving average, forecast the fund price for months 5 and 6. 2. Using a three-month weighted average with the most recent month weighted 0.60, the next most recent month weighted 0.30, and the third month weighted 0.10, forecast the fund price for months 5 and 6. 3. Compute an exponentially smoothed forecast using a = 0.40 and forecast the fund price for months 5 and 6. We will consider that F4= 57. 4. Knowing that the Fund price for month 6 is equal to 70 (D6 = 70), compare the forecasts in (a) and (b) using MAD and indicate the most accurate.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Operations Management Creating Value Along the Supply Chain

Authors: Roberta S. Russell, Bernard W. Taylor

7th Edition

9781118139523, 0470525908, 1118139526, 978-0470525906

More Books

Students also viewed these Marketing questions

Question

What are some typical benefits from implementing lean?

Answered: 1 week ago