The following table provides the Dow Jones Industrial Average opening index valu

Question

The following table provides the Dow Jones Industrial Average opening index value on the first working day of 1991-2013.

A - Develop a regression model and use it to predcit the opening DJIA index value for years 2014, 2015 and 2016. Find r2.

B - Using the DJIA data from above, use exponential smooth with trend adjustment to forecast the opening DJIA value for 2014. Use - 0.8 and beta- 0.4

C- Compare the MSE for this technique to the MSE in the regression model from A.

Please show all formulas and data.

Year DJIA 1991 3315 1992 3529 1993 3631 1994 4084 1995 4164 1996 5447 1997 6778 1998 8238 1999 9577 2000 10866 2001 11157 2002 10388 2003 10002 2004 10819 2005 11250 2006 11050 2007 10492 2008 11794 2009 10104 2010 11763 2011 12067 2012 11920 2013 12028

Explanation / Answer

A. the regression model for DJIA values is DJIA= (425.256*YEAR)-842472.674.

B. DJIA value for 2014 = 12160.93

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