Question

Consider the following time series.

t	1	2	3	4	5	6	7
yt	125	108	102	99	94	92	86

(b)	Use simple linear regression analysis to find the parameters for the line that minimizes MSE for this time series.
	If required, round your answers to two decimal places.
	y-intercept, b0 =
	Slope, b1 =
	MSE =
(c)	What is the forecast for t = 8?
	If required, round your answer to one decimal place.

Answer 1

Solution:

we solve this problem using minitab statistical software as below

Regression Equation

Y = 123.29 - 5.61 t

y-intercept, b0 = 123.29
Slope, b1 = -5.61
MSE = 20.91

Now

What is the forecast for t = 8?

Y = 123.29 - 5.61 t

Y = 123.29 - 5.61 * 8

Y = 123.29 - 20.88

Y = 102.1

Thank You..!!

for reference minitab output: