Consider the quarterly earnings pershare of the Johnson & Johnson from the first quarter of 1992 to the secondquarter of 2011. The data are in the file q-jnj-earns-9211.txt and are obtainedfrom the First Call Historical Database of Thomson Reuters. Take logtransformation of the data if necessary.

(a) Build a time series model for thedata. Perform model checking to assess the adequacy of the fitted model. Writedown the model.

(b) Refit the model using data from1992 to 2008. Perform 1-step to 10-step ahead forecasts of the quarterly earningsand obtain a forecast plot.