Question: The Percentage of individual investors’ portfolios…
The Percentage of individual investors’ portfolios committed to stock depends on the state of the community. The following table reports the percentage of stocks in a portfolio for nine quarters
| Quarter | Stock | Quarter | Stock |
| 1 | 29.8 | 6 | 31.5 |
| 2 | 31.0 | 7 | 32.0 |
| 3 | 29.9 | 8 | 31.9 |
| 4 | 30.1 | 9 | 30.0 |
| 5 | 32.2 |
- Use exponential smoothing to forecast this time series. Consider smoothing constants of =0.2, 0.3, and 0.4. What value of the smoothing constant provides the best forecast?
- What is the forecast of the percentage of assets committed to stocks for the next quarter?
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