Economics Question

Assignment 2: Forecasting

Introduction

This assignment will test your knowledge of basic statistical concepts, the components of time series data, and using a correlogram for model selection.

Instructions

Submit your answers to all questions in a Word document. Download the data sets and use Excel to solve the problems.

Question 1. Thirty graduate students were asked how many credit hours they were taking in the current quarter. Download the available dataDownload Download the available data

1. Calculate the mean, median, standard deviation, variance, and range for this sample using Excel. Write a sentence explaining what each measure means.
2. What is the standard error of the mean based on the data?
3. What would be the best point estimate for the population credit hours? (“Population” refers to all graduate students’ credit hours in the universe.)
4. What is the 95% confidence interval for the means of credit hours? What is the 90% confidence interval?

Question 2. An investment manager has been working on a report for forecasting Apple stock price. Your job is to help him to determine whether there is a trend and/or seasonality in Apple stock prices. Download the dataDownload Download the data

1. Prepare a time series plot of these data. (In Word document as well as in Excel)
2. Include a trend line using the Excel Analysis ToolPak. On the basis of your analysis, do you think there is a significant trend in Apple stock prices? Explain.

Watch the following video to learn how to add a trendline:

Watch the video: How to Add a TrendlineLinks to an external site.

1. Is there seasonality? Explain.
2. What forecasting method might be appropriate for Apple stock prices according to the guidelines provided in your Table 2.1 (Chapter 2, page 58) of your textbook? (Textbook: J. Holton Wilson and Barry P. Keating, Forecasting and Predictive Analytics with ForecastX, 7th ed., McGraw-Hill Publishers, 2018. ISBN: 9781259903915)

Question 3. The given figure is the correlogram for the total number of houses in the U.S. (quarterly data).

[Image unavailable: Correlogram of US property values]

On the basis of the correlogram, do you think there is a significant trend? Explain.

Submission

• Submit your answers in a Word document.
• Submit the Excel files to show your calculations.
• Include the relevant graphs of actual and forecast values of the series. Please do not forget to title your graph.

Submit your calculations and answers in a 1–3-page document and spreadsheet to the Dropbox by Due Date.

Evaluation Criteria

All forecasting assignments together make up 24% of the total course score. This assignment is worth 40 points. Here is the rubric Download rubricfor the assignment.

View Rubric

Forecasting Assignment Rubric

Forecasting Assignment Rubric
Criteria	Ratings	Pts
Evidence the problem was understood view longer description	6 pts Exemplary Performance Shows very good understanding of the problem and its solution technique 4 pts At or Above Average Shows sound understanding of the problem 2 pts At or Below Average Shows limited understanding of the problem 0 pts Low Performance Shows very limited or no understanding of the problem	/ 6 pts
Technique view longer description	10 pts Exemplary Performance Very effective use of technique; uses forecasting techniques efficiently while justifying the solution 7.5 pts At or Above Average Effective use of technique; uses appropriate technique, but some parts of the technique or summary statistics left unexplained 5 pts At or Below Average Limited use of appropriate techniques; is not precise in using forecasting technique 2.5 pts Low Performance Very limited use of technique; uses unsuitable techniques or simple manipulation of the data in attempting to find a solution	/ 10 pts
Answer view longer description	10 pts Exemplary Performance All correct answers, all requested explanations perfectly presented 7.5 pts At or Above Average Most answers correct, but incomplete explanations or incorrect reasoning 5 pts At or Below Average Most answers incorrect, appropriate techniques 2.5 pts Low Performance Incorrect answers, inappropriate techniques	/ 10 pts
Completion view longer description	8 pts Exemplary Performance All parts of the assignment completed 6 pts At or Above Average Most parts of the assignment completed 4 pts At or Below Average Some parts of the assignment completed 2 pts Low Performance Few to no parts of assignment completed	/ 8 pts
Organization and Neatness view longer description	6 pts Exemplary Performance Clear organization with few or no grammar or spelling errors 4 pts At or Above Average Clear organization with some grammar or spelling errors 2 pts At or Below Average Clear organization with significant grammar and spelling errors 0 pts Low Performance Unclear organization with significant grammar and spelling errors	/ 6 pts
Total Points: 0