Question 13.54

13.54 It’s exponential.

In the previous exercise, you explored the behavior of the exponential smoothing model weights when the smoothing constant is between 0 and 1. We noted in the section that software can actually report an optimal smoothing constant greater than 1. Suppose software reports an optimal of 1.6.

  1. What is the value of the damping factor?
  2. Starting with the current observation and going back to , calculate the weights for each of these observations.
  3. Describe how the weights behave moving back in time.