Question: The following table reports the percentage of stocks in a portfolio for nine quarters:
a. Construct a time series plot. What type of pattern exists in the data?
b. Use trial and error to find a value of the exponential smoothing coefficient a that results in a relatively small MSE.
c. Using the exponential smoothing model you developed in part b, what is the forecast of the percentage of stocks in a typical portfolio for the second quarter of year 3?