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In: Statistics and Probability

The following table provides the Dow Jones Industrial Average (DJIA) opening index value on the first...

The following table provides the Dow Jones Industrial Average (DJIA) opening index value on the first working day of 1991–2010:

YEAR DJIA YEAR 2 DJIA

2010 10,431 2000 11,502

2009 8,772 1999 9,213

2008 13,262 1998 7,908

2007 12,460 1997 6,448

2006 10,718 1996 5,117

2005 10,784 1995 3,834

2004 10,453 1994 3,754

2003 8,342 1993 3,301

2002 10,022 1992 3,169

2001 10,791 1991 2,634

• Develop a trend line and use it to predict the opening DJIA index value for years 2011, 2012, and 2013. Find the MSE for this model.

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Expert Solution

TREND IS BEST AS IT HAS LEAST MSE

orchestra answered 2 years ago
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