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Problem 1: Time Series Forecasting Suppose that I have the following stock prices for the...

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Accounting

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Problem 1: Time Series Forecasting Suppose that I have the following stock prices for the last seven days. Day Stock Price 4MA Errors Abs Deviation 1 $15.15 2 $15.25 3 $15.40 4 $15.67 5 $15.50 6 $15.75 7 $15.78 a) Calculate 4 Day Moving Average. b) What is the Average Error and Mean Absolute Deviation for 4 Day Moving Average? c) Suppose that I told you that the Linear Regression for this data was Stock Price = 15.11 + .06*Day. Calculate predictions for each day: is this "better than the other forecasts? Explain why Linear Regression may be a good forecasting method for this data. Note: for the test, I may add additional information such as "Tell me what the 3MA would be for Day 7" or "Would alpha = 4 have lower errors than alpha = 2 if I use Simple Exponential Smoothing?" I've pasted a second table below if you need it. Errors Abs Deviation Day Stock Price 1 $15.15 2 $15.25 3 $15.40 4 $15.67 5 $15.50 $15.75 7 $15.78 mist vo

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