Introduction to Management Science 12th Edition by Bernard Taylor

Exercise 60

The consumer loan department at Central Union Bank and Trust wants to develop a forecasting model to help determine its potential loan application volume for the coming year. Because adjustable-rate home mortgages are based on government long-term treasury note rates, the department collected the following data for 3- to 5-year treasury note interest rates for the past 24 years:
Develop an appropriate forecast model for the bank to use to forecast treasury note rates in the future and indicate how accurate it appears to be compared to historical data.