1. Fit a linear and quadratic trends to your series. Then, create a line chart with your original

series and the two trends. Which trend seems to best fit the series? Explain.

2. Fit a linear and quadratic trends to the log of your series. Then, create a line chart with the

log of your series and the two trends. Which trend seems to best fit the series? Do you see a

difference between the best trend in this question and in the previous one? Explain.

Answer the following questions using the log of your series and the trends computed in question 2.

3. Plot the detrended series using the trend that best fit the series. Briefly describe what you see:

Do you better detect short term fluctuations?

4. Using a moving average of order 5, compute the cyclical component of your series. Then, plot

the cycle and briefly describe what you see: interpret the values of some peaks and troughs.

5. Plot the low frequency of your series and briefly describe what you see.

6. Compute the seasonal component and represent it on a bar chart (only the 4 quarters). Interpret

the four seasonal values.