Activities: Week 5

Participate in these workshop questions here: https://partici.fi/61758592

Household budget forecasting

1. Create a training set for household wealth (hh_budget) by withholding the last four years as a test set.
2. Fit all the appropriate benchmark methods to the training set and forecast the periods covered by the test set.
3. Compute the accuracy of your forecasts. Which method does best?
4. Do the residuals from the best method resemble white noise?

True or false?

1. Good forecast methods should have normally distributed residuals.
2. A model with small residuals will give good forecasts.
3. The best measure of forecast accuracy is MAPE.
4. If your model doesn’t forecast well, you should make it more complicated.
5. Always choose the model with the best forecast accuracy as measured on the test set.

2024 Exam part A

Discuss topics A2, A3, and A6