Time series decomposition seeks to separate the time series (Y) into 4 components: trend (T), cycle (C),
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- Time series decomposition seeks to separate the time series (Y) into 4 components: trend (T), cycle (C), seasonal (S), and irregular (I). What is the difference between these components?
- The model can be additive or multiplicative.When we do use an additive model? When do we use a multiplicative model?
- The following list gives the gross federal debt(in millions of dollars) for the U.S. every 5 years from 1945 to 2000:
YearGross Federal Debt ($millions)
1945260,123
1950256,853
1955274,366
1960290,525
1965322,318
1970380,921
1975541,925
1980909,050
19851,817,521
19903,206,564
19954,921,005
20005,686,338
- Construct a scatter plot with this data. Do you observe a trend? If so, what type of trend is observed?
- Use Excel to fit a linear trend and an exponential trend to the data. Display the models and their respective r^2.
- Interpret both models. Which model seems to be more appropriate? Why?
Related Book For
An Introduction to Investment Banks, Hedge Funds, and Private Equity
ISBN: 978-9380931074
1st edition
Authors: David P. Stowell
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