Answer to Question #244564 in Statistics and Probability for CHERRY

Question

A credit union bank needs to forecast monthly loan requests. Assume the time series is stationary. Answer questions 2-1, 2-2, and 2-3.

2-3 Two months later, at the end of t=24, there is one month left before the end of the quarter. The most recent records collected are now available as Y23=3.895, and Y24 = 4.2. Should management expect some funds left unused at the end of the quarter, if the amount made available to meet loan requests were 12.5 million at the beginning of the quarter? Use the same weighted moving average (of 0.7, and 0.3)

a. Yes. Amount left = 12.5 - 3.895 - 4.2 - 4.12

b. Yes. Amount left = 12.5 - 3*4.12

c. Impossible to answer. Y25 is unknown.

d. Calculate F(25) = F(24+1), then the amount left =12.5 - 3*F(25). 

e. None of the above