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##### MAT 540 HW week4

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MAT 540 HW week4;9. Emily Andrews has invested in a science and technology mutual fund. Now she is considering liquidating and investing in another fund. She would like to forecast the price of the science and technology fund for the next month before making a decision. She has collected the following data on the average price of the fund during the past 20 months;Month;Fund Price;1;\$63 1/4;2;60 1/8;3;61 3/4;4;64 1/4;5;59 3/8;6;57 7/8;7;62 1/4;8;65 1/8;9;68 1/4;10;65 1/2;11;68 1/8;12;63 1/4;13;64 3/8;14;68 5/8;15;70 1/8;16;72 3/4;17;74 1/8;18;71 3/4;19;75 1/2;20;76 3/4;a. Using a 3-month average, forecast the fund price for month 21.;b. Using a 3-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 month 21.;c. Compute an exponentially smoothed forecast, using?=0.40, and forecast the fund price for month 21.;d. Compare the forecasts in (a), (b), and (c), using MAD, and indicate the most accurate.;26. Carpet City wants to develop a means to forecast its carpet sales. The store manager believes that the store?s sales are directly related to the number of new housing starts in town. The manager has gathered data from county records on monthly house construction permits and from store records on monthly sales. These data are as follows;Monthly Carpet Sales (1,000 yd.);Monthly Construction Permits;5;21;10;35;4;10;3;12;8;16;2;9;12;41;11;15;9;18;14;26;a. Develop a linear regression model for these data and forecast carpet sales if 30 construction permits for new homes are filed.;b. Determine the strength of the causal relationship between monthly sales and new home construction by using correlation.

Paper#31306 | Written in 18-Jul-2015

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