# EWMA time series question with plots and i have no idea what to do

Anonymous

Question description

 01020-303QuarterPercent ChangeEdit Coordinates...(0,0)x y graphwequals=0.30.3 The plots to the left and right show exponentially weighted moving averages​ (EWMA) of the percentage change of a​ country's gross national product​ (GNP). The time series is quarterly for a​ five-year period. To the​ left, the weight w in the EWMA is 0.30.3​, and wequals=0.80.8to the right. The EWMA in both cases is shown as a line and the surrounding data as dots. Complete parts a through c below. 01020-303QuarterPercent ChangeEdit Coordinates...(0,0)x y graphwequals=0.80.8

(a) Which smoothing constant do you think produces a better summary of the underlying trend in the percentage changes in​ GNP?

The EWMA with

wequals=

0.8

is better because it

captures less random variation.

(b) In the most recent quarter​ (the last data point in this​ series), the GNP was estimated to be

\$11.18111.181

billionbillion.

What would you​ forecast, having seen these​ plots, for GNP for the next​ quarter?

The GNP for the next quarter should be about

\$nothing

billionbillion.

(Round to three decimal places as​ needed.)

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