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Consider the following time series data:
Month
1
2
3
4
5
6
7
Value
24
13
20
12
19
23
15
a. Compute MSE using the most recent value as the forecast for the next period. What is the forecast for month 8?
b. Compute MSE using the average of all the data available as the forecast for the next period. What is the forecast for month 8?
c. Which method appears to provide the better forecast?
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