Tag: time series and forecasting

Questions Related to time series and forecasting

Moving average method is used for measurement of trend when:

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  1. Trend is linear

  2. Trend is non linear

  3. Trend is curvilinear

  4. None of them

Show answer
Correct Option: A
Explanation:

$\Rightarrow$  Moving average method is used for measurement of trend when : $Trend\, is\,linear$.

$\Rightarrow$  In the method of moving average, successive arithmetic averages are computed from overlapping groups of successive values of a time series. Each group includes all the observations in a given time interval,termed as the period of moving average.
$\Rightarrow$  The next group is obtained by replacing the oldest value by thenext value in the series. The averages of such groups are known as the moving averages. The moving averages of a group are always shown at the center of its period.

In time series seasonal variations can occur within a period of:

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  1. Four years

  2. Three years

  3. One year

  4. Nine years

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  In time series seasonal variations can occur within a period of : $One\,year$.

$\Rightarrow$  Over a span of one year, seasonal variation takes place due to the rhythmic forces which operate in a regular and periodic manner. These forces have the same or almost similar pattern year after year.
$\Rightarrow$  The seasonal variations may be due to various seasons or weather conditions for example sale of cold drink would go up in summers & go down in winters.

Indicate which of the following an example of seasonal variations is:

business mathematics and statistics moving averages introduction to time series introduction to time series and forecasting time series and forecasting uses of average in day-to-day life

  1. Death rate decreased due to advance in science

  2. The sale of air condition increases during summer

  3. Recovery in business

  4. Sudden causes by wars

Show answer
Correct Option: B
Explanation:

$\Rightarrow$  Example of seasonal variation is : $The\,sale\,of\,air\,condition\,increases\,during\,summer.$

$\Rightarrow$  Over a span of one year, seasonal variation takes place due to the rhythmic forces which operate in a regular and periodic manner. These forces have the same or almost similar pattern year after year.
$\Rightarrow$  The seasonal variations may be due to various seasons or weather conditions.
$\Rightarrow$  These variations may be also due to man-made conventions & due to habits, customs or traditions.