Question: Here are the earnings per share for two companies by quarter from he first quarter of 2004 through the second of 2007. forecast earnings per share for the rest of 2007 and 2008. use exponential smoothing to forecast the third period of 2007, and the time series decomposition method to forecast the last two quarters of 2007 and all four quarters of 2008.

1. for the exponential smoothing method, choose the first quarter of 2004 as the beginning forecast. Make two forecasts: one with \[\alpha \] =0.10 and one with \[\alpha \] =0.30.
2. using the MAD method of testing the forecasting model’s performance, plus actual data from 2004 through the second quarter of 2007, how well did the model perform.
3. using the decomposition of a time series method of forecasting, forecast earnings per share for the last two quarters of 2007 and all four quarters of 2008. is there a seasonal facto in the earnings?
4. using the forecasts, comment on each company.

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