Question 1: The data in represent the closing values of the Dow Jones Industrial Average (DJIA) from 1979 through 2008.
a) Plot the time series.
b) Find a three-years moving average to the data and plot the results.
c) Using a smoothing coefficient of W = 0.40, exponentially smooth the series and plot the results.
Question 2: Refer to the data set given in.
a) Compute a linear trend forecasting equation and plot the trend line.
b) Compute a quadratic trend forecasting equation and plot the results.
c) Compute an exponential trend forecasting equation and plot the results.
d) Which model is the most appropriate, using adjusted r2 values and first, second, and percentage differences.
Question 3: Refer to the data set given in file.
a) Fit a third-order autoregressive model to the DJIA and test for the significance of the third-order autoregressive parameter using ? = 0.05.
b) If necessary, fit a second-order autoregressive model to the DJIA and test for the significance of the second-order autoregressive parameter using α = 0.05.
c) If necessary, fit a first-order autoregressive model to the DJIA and test for the significance of the first-order autoregressive parameter using α = 0.05.
d) Using the most appropriate model in a) - c), forecast the closing values for 2009 and 2010.