Consider the following portion of data on real estate loans granted by FDIC-insured Commercial Banks in the United States (in billions of U.S. dollars, base = 2007) from 1972 to 2007; the full data set can be found on the text website, labeled Loans.
a. Plot the above series and comment on the growth of real estate loans.
b. Estimate the linear and exponential trend models for real estate loans. Compare the models in terms of their mean square errors. Use the preferred model to make a forecast for real estate loans in year 2008.
c. Compare the in-sample performance of the preferred