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Question: Corporate triple A bond interest rates for 12 consecutive months follow.

9.5 9.3 9.4 9.6 9.8 9.7 9.8 10.5 9.9 9.7 9.6 9.6

a. Construct a time series plot. What type of pattern exists in the data?

b. Develop three-month and four-month moving averages for this time series. Does the three-month or the four-month moving average provide the better forecasts based on MSE? Explain.

c. What is the moving average forecast for the next month?

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