Homework SourseMean square errors for comparison Solutiona Using excel to d
Mean square errors for comparison
Solution
a) Using excel to do the analysis , we get
b)
Since mean square is lesser for the first method, we prefer the moving average mathod.
| number of periods: | 3 | ||||||
| t | stock price | 3MA | error | error*error | |||
| 1 | 240 | ||||||
| 2 | 350 | ||||||
| 3 | 230 | 273.3 | -43 | 1877.778 | Mse=9755.56/12 | ||
| 4 | 260 | 280.0 | -20 | 400 | 812.9633 | ||
| 5 | 280 | 256.7 | 23 | 544.4444 | |||
| 6 | 320 | 286.7 | 33 | 1111.111 | |||
| 7 | 220 | 273.3 | -53 | 2844.444 | |||
| 8 | 310 | 283.3 | 27 | 711.1111 | |||
| 9 | 240 | 256.7 | -17 | 277.7778 | |||
| 10 | 310 | 286.7 | 23 | 544.4444 | |||
| 11 | 240 | 263.3 | -23 | 544.4444 | |||
| 12 | 230 | 260.0 | -30 | 900 | |||
| 9755.556 |
