# Testing for serial correlation

Membership on a stock exchange for five years is given below:

year members

1996 520

1997 510

1998 505

1999 508

2000 512

Use the exponential smoothing procedure to obtain estimates of the trend (this is not the logarithm approach here.

Set the smoothed value for 1996 equal to the actual and use a smoothing constant o = 0.4. Compute the forecasted value for 2000.

2. True or false?

A common method of testing for auto collinearity (serial correlation) is a Wilcoxon signed rank test for one sample.

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Answer

Simple Exponential Smoothing

Alpha

.40

t Members Smoothed Forecast % ...

#### Solution Summary

The solution provides step by step method for the calculation of serial correlation . Formula for the calculation and Interpretations of the results are also included.