The linear trend forecasting equation for an annual time series containing 42 values (from 1976 to 2017) on net sales (in $billions) is Yi = 1.2 +0.5Xi.
What is the fitted trend value for the tenth year, and what is the fitted trend value for the most recent year?
To find the fitted trend value for the tenth year, we substitute X = 10 into the equation:
Y10 = 1.2 + 0.5(10)
Y10 = 1.2 + 5
Y10 = 6.2
Therefore, the fitted trend value for the tenth year is $6.2 billion.
To find the fitted trend value for the most recent year, we substitute X = 42 (since the data is from 1976 to 2017) into the equation:
Y42 = 1.2 + 0.5(42)
Y42 = 1.2 + 21
Y42 = 22.2
Therefore, the fitted trend value for the most recent year is $22.2 billion.