Problem 1

Apex Mutual Fund invests primarily in technology stocks. The price of the fund at the end of each month for the 12 months of 2019 is shown in Table below.

a. Find the forecast value of the mutual fund for each month by using a naïve model. The value for December 2018 was 19.00.

b. Evaluate this forecasting method using the MAD.

c. Evaluate this forecasting method using the RMSE. d. Evaluate this forecasting method using the MAPE.

e. Using a naive model, forecast the mutual fund price for January 2020.

f. Use a three-month moving average to forecast the mutual fund price for January 2020. Is this forecast better than the forecast made using naive model? Explain.

g. Use a four-month weighted moving average to forecast the mutual fund price for January 2020. Is this forecast better than the forecast made using three month moving average? Explain.