The accompanying dataset provides the closing prices for four stocks and the stock exchange over 12 days. Complete parts a through c.
Use Excel's Data Analysis Exponential Smoothing tool to forecast each of the stock prices using simple exponential smoothing with a smoothing constant of 0.3.(Please show all work involved with the questions)
Complete the exponential smoothing forecast model for stock A.
(Type integers or decimals rounded to two decimal places as needed.)
Date
|
Forecast A
|
09/03/2010
|
|
09/07/2010
|
?
|
09/08/2010
|
?
|
09/09/2010
|
?
|
09/10/2010
|
?
|
09/13/2010
|
?
|
09/14/2010
|
?
|
09/15/2010
|
?
|
09/16/2010
|
?
|
09/17/2010
|
?
|
09/20/2010
|
?
|
09/21/2010
|
?
|
Complete the exponential smoothing forecast model for stock B.
(Type integers or decimals rounded to two decimal places as needed.)
Date
|
Forecast B
|
09/03/2010
|
|
09/07/2010
|
?
|
09/08/2010
|
?
|
09/09/2010
|
?
|
09/10/2010
|
?
|
09/13/2010
|
?
|
09/14/2010
|
?
|
09/15/2010
|
?
|
09/16/2010
|
?
|
09/17/2010
|
?
|
09/20/2010
|
?
|
09/21/2010
|
?
|
b. Compute the MAD and MSE for each of the models.
Compute the MAD (mean absolute deviation) for each of the models.
(Type integers or decimals rounded to two decimal places as needed.)
Compute the MSE (mean square error) for each of the models.
(Type integers or decimals rounded to two decimal places as needed.)
c. Does a smoothing constant of 0.1 or 0.5 yield better results?
Select the correct answer below and, if necessary, fill in the answer box to complete the choice.
A. A smoothing constant of ? yields better results because the values of MAD and MSE are all lower.
(Type an integer or a decimal.)
B. A smoothing constant of ? yields better results because the values of MAD and MSE are all higher.
(Type an integer or a decimal.)
C. Neither 0.1nor 0.5 yield better results because the values of MAD and MSE for α=0.3 are all higher.
D. Neither 0.1 nor 0.5 yield better results because the values of MAD and MSE for α=0.3 are all lower.
Date |
A |
B |
C |
D |
Stock Exchange |
09/03/2010 |
126.58 |
18.27 |
21.21 |
15.44 |
10539.22 |
09/07/2010 |
124.78 |
18.01 |
20.71 |
15.45 |
10420.74 |
09/08/2010 |
125.37 |
18.01 |
20.46 |
15.77 |
10372.96 |
09/09/2010 |
126.34 |
18.03 |
20.47 |
16.02 |
10367.15 |
09/10/2010 |
128.69 |
17.88 |
20.64 |
15.93 |
10377.41 |
09/13/2010 |
130.61 |
18.67 |
21.26 |
16.13 |
10462.87 |
09/14/2010 |
128.48 |
18.81 |
21.41 |
16.04 |
10566.52 |
09/15/2010 |
129.46 |
18.82 |
21.76 |
16.33 |
10651.19 |
09/16/2010 |
129.12 |
19.14 |
21.86 |
16.33 |
10502.38 |
09/17/2010 |
130.36 |
18.98 |
22.05 |
16.42 |
10564.55 |
09/20/2010 |
130.85 |
18.78 |
21.97 |
16.62 |
10722.37 |
09/21/2010 |
132.03 |
19.25 |
21.62 |
16.69 |
10810.05 |