Explain why? Hello- this is a homework question I am struggling with. Thank you

Question

Explain why?

Hello- this is a homework question I am struggling with. Thank you for your help.

Three forecast models below :

                Model 1                   Model 2                           Model 3

Type           SPES                   Regression                         Regression with seasonality

MSE           8755.3                  4876.2                               5945.8

Which statement best describes :

Data contains only a random (irregular )component

The data contains a trend component but no seasonality

The data contains both trend and seasonality

None of the above

Explain why?

Explanation / Answer

Here' the answer of the question:

The data contains both trend and seasonality

Because Model 3 ' value is more than Model 2' , meaning it is capturing MSE of SPES ( Model 1) in it. Model 2 is already capturing the 'trend' component of it

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