CoastCo Insurance is interested in developing a forecast of larceny thefts in the United States. Download the spreadsheet for the available data.

Instructions

Submit your answers to both questions in a Word document. Download the data sets and use Excel to solve the problems.

“Question 1”. CoastCo Insurance is interested in developing a forecast of larceny thefts in the United States. Download the spreadsheet for the available data.
a. Plot this series in a time series plot and make a naive forecast for years 2 through 19.
b. Plot actual and forecast values of the series for the years 1 through 19. (You will not have an actual value for year 19 or a forecast value for year 1.)
c. Calculate the RMSE and MAD for years 2 through 18. On the basis of these measures and what you see in the plot, what do you think of your forecast? Explain.

Watch the given video if you do not know how to plot data in Excel:
Igines. (2012, December 9). How to make a line graph in excel (scientific data) [Video file] [6 min 41 sec]. Retrieved from https://www.youtube.com/watch?v=Xn7Sd5Uu42A&t=1s

“Question 2”. As the worlds economies become increasingly interdependent, various exchange rates between currencies have become important in making business decisions. For many U.S. businesses, the European Union exchange rate (in euro per U.S. dollar) is an important decision variable. Download the spreadsheet with the data on this exchange rate (EXEUR) by month for a two-year period.
a. Prepare a time series plot of this data series.
b. Use the naive forecasting model to forecast EXEUR for each month from year 1 M2 through year 3 M1.
c. Plot actual and forecast values of the series for the year 1 M1 through year 3 M1. (You will not have an actual value for year 3 M1 or a forecast value for year 1 M1)
d. Calculate RMSE for the period from year 1 M2 through year 2 M12.