U.S. Treasury 10-Year Bond Yields at Weeks End (n = 52 weeks)
Week			Yield			Week			Yield			Week			Yield			Week			Yield
	4/2/04			3.95			7/2/04			4.63			10/1/04			4.10			12/31/04			4.29
	4/9/04			4.21			7/9/04			4.49			10/8/04			4.20			1/7/05			4.28
	4/16/04			4.36			7/16/04			4.47			10/15/04			4.08			1/14/05			4.25
	4/23/04			4.43			7/23/04			4.46			10/22/04			4.03			1/21/05			4.19
	4/30/04			4.49			7/30/04			4.56			10/29/04			4.05			1/28/05			4.19
	5/7/04			4.62			8/6/04			4.41			11/5/04			4.12			2/4/05			4.14
	5/14/04			4.81			8/13/04			4.28			11/12/04			4.22			2/11/05			4.06
	5/21/04			4.74			8/20/04			4.23			11/19/04			4.17			2/18/05			4.16
	5/28/04			4.68			8/27/04			4.25			11/26/04			4.20			2/25/05			4.28
	6/4/04			4.74			9/3/04			4.19			12/3/04			4.35			3/4/05			4.37
	6/11/04			4.80			9/10/04			4.21			12/10/04			4.19			3/11/05			4.45
	6/18/04			4.75			9/17/04			4.14			12/17/04			4.16			3/18/05			4.51
	6/25/04			4.69			9/24/04			4.04			12/24/04			4.21			3/25/05			4.59

(a-1) Select an Excel line graph of the following bond yield data.

Yield A	Yield B	Yield C	Yield D

multiple choice 1

• Yield A

• Yield B

• Yield C

• Yield D

(a-2) Describe the pattern. Is there a consistent trend? The pattern observed is (Click to select) linear cyclical circular . The trend is (Click to select) not consistent consistent . (b) Perform exponential smoothing with = .20. Use both methods A and B to initialize the forecast. Record the statistics of fit. (Round the Mean squared error to 3 decimal places, percent values to 1 decimal place and Forecast to 2 decimal places.)

	= .20
Mean squared error
Mean absolute percent error			%
Forecast for period 53

(c) Do the smoothing again with = .10 and then with = .30, recording the statistics of fit. (Round the Mean squared error to 3 decimal places and percent values to 1 decimal place.)

	= .10			= .30
Mean squared error
Mean absolute percent error			%			%

(d) Compare the statistics of fit for the three values of . (Click to select) Quadratic Linear Exponential smoothing seems like a good choice for making a one-period-ahead forecast. (e) Make a one-period forecast (i.e., t = 53) using each of the three values. How did affect your forecasts? As increases, the value of forecast (Click to select) increases remains the same decreases .