The data below consist of the actual closing price of the common stock of AT&T Corp on 6 recent trading days. 3-day moving average and 4-day moving average forecasts are also tabulated below.

( see attached)

a.) Which method, the 3-day MA, or the 4-day MA yields the more accurate forecast for day 6? And why?

b.) Forecast the closing price for day 7 using :

i) The 3-day moving average method.

ii) Exponential smoothing method ( = 0.2). The exponential smoothing forecast for day 6 is $22.18.

\begin{tabular}{|l|l|l|l|} \hline Time(t) & ActualClosingPrice($) & 3-dayMAforecast($) & 4-dayMAforecast($) \\ \hline 1 & 22.10 & & \\ \hline 2 & 22.73 & 22.48 & \\ \hline 3 & 22.60 & 22.36 & 22.30 \\ \hline 4 & 21.76 & 22.17 & \\ \hline 5 & 22.14 & & \\ \hline \end{tabular}