Chapter 16, Problem 12PS

There has been much publicity about bounces paid to workers on Wall Street. Just how large are these bonuses? The file Bounces contains the bonuses paid $(\text{in}\text{\$000)}$ from 2000 to 2016.

a. Plot the data.

b. Compute a linear tread forecasting equation and plot the results.

c. Compute a quadratic tread forecasting equation and plot the results.

d. Compute an exponential tread forecasting equation and plot the results.

e. Using the forecasting equations in (b) through (d), what are your annual forecasts of the bounces for 2017 and 2018?

f. How can you explain the difference in the three forecasts in (e)? What forecast do you think you should use? Why?