Question: Using an additive time series model, the quarterly trend (Y) is given by Y = 65 + 7t, where t is the quarter ( starting with t = 1 in the first quarter of 20X5). If the seasonal component in the fourth quarter is -30, what is the forecast for the actual value for the fourth quarter of 20X6, to the nearest whole number?
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Time series analysis
7y ago#1Please do not simply set test questions and expect an answer.
You must have an answer in the same book in which you found the question, so ask about whatever it is in the answer that you are not clear about and then I will explain.
For the first quarter of 20X5, t = 1.
For the second quarter of 20X5, t = 2
For the third quarter of 20X5, t =3
For the fourth quarter of 20X5, t = 4
For the first quarter of 20X6, t = 5
and so on
So for the fourth quarter of 20X6, t = 8.
Put t = 8 in the equation to get the trend. Then subtract 30 for the seasonal variation.
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