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1) Mary Hernandez has invested in the stock mutual fund and she is allowing for liquidating and investing in bond fund. She would like to predict the price of stock fund for next month before making a decision. She has gathered the following data on average price of fund in the past 20 months.

Month Fund Price Month Fund Price

1 63 1/4 11 68 1/8
2 60 1/8 12 63 1/4
3 61 3/4 13 64 3/8
4 64 1/4 14 68 5/8
5 59 3/8 15 70 1/8
6 57 7/8 16 72 3/4
7 62 1/4 17 74 1/8
8 65 1/8 18 71 3/4
9 68 1/4 19 75 1/2
10 65 1/2 20 76 3/4

a) By using a three-month moving average, predict fund price for month 21.

b) By using a three3-month weighted average with most current month weighted 0.60, next most current month weighted 0.30, and 3rd month weighted 0.10, predict fund price for month 21.

c) find out the exponentially smoothed predict using a=0.40 and predict the fund price for month 21.

d) Contrast the forecasts in (a), (b), and (c) by using MAD and indicated the most correct.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M915349

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