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    Forecasting a time series

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    In forecasting a monthly time series over a five-year period from January 2005 to December 2009, the exponential trend forecasting equation for January is log Yi = 2.0 + 0.01 Xi + 0.10 (January)

    Take the anti-log of the appropriate coefficient from this equation and interpret the:

    (a) Y intercept, b0
    (b) Monthly compound growth rate
    (c) January multiplier

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    Solution Preview


    First, we take the antilog of the equation: Yi=exp(2.0 + 0.01 Xi + 0.10 (January) )=exp(2.0)*exp(0.01Xi)*exp(0.10(January)).

    (a) Y intercept or bo: Here ...

    Solution Summary

    The expert examines forecasting a time series with the anti-log of the appropriate coefficient from the equation and interprets the results.