Business Forecasting 6th Edition by Holton Wilson, Barry Keating, John Solutions

Exercise 2

Use a regression of deseasonalized The Gap sales as a function of disposable personal income as the basis for a forecast of The Gap sales for 2006. Be sure to reseasonalize your forecast; then graph the actual The Gap sales along with your forecast. What do you think would happen to the accuracy of your forecast if you extended it out through 2010? Why?