Problem 3. Annual retirement assets (in billions of dollars) for two fund
types from 2006 through
2010 are given in the table below.
Year
IRA
401(k)
2006
3,652
2,396
2007
4,207
2,768
2008
4,784
2,982
2009
3,759
2,275
2010
4,230
2,754
a.
Compute simple indexes for each of the two time
series using 2006 as the base period. 1pt
b.
Construct a time series plot for IRA index ONLY. 1 pt
c.
Use the Exponential smoothing and Holt’s trend with
coefficients of w=0.5 and u=0.6 to
forecast the assets in the IRA account for the year 2015. 2 pts