1. The term autocorrelation refers to:

A) a persistent, long-term rise and fall.

B) a prediction of a future value of a time series.

C) averaging the last k values of a time series.

D) measuring the strength of the linear relationship between successive values of the same variable.

2. A long-term increase or decrease in a time series is known as:

A) a trend. B) seasonal. C) cyclical. D) a random process.

Question 3

A time series that exhibits rises and falls that are of a known fixed period is called:

A) a trend.

B) seasonal.

C) cyclical.

D) a random process.

Question 4

A time series that exhibits rises and falls that are not of a fixed period is called:

A) a trend.

B) seasonal.

C) cyclical.

D) a random process.

Question 5

A time series that is uncorrelated over time is called: A) a trend.

B) seasonal.

C) cyclical.

D) a random process.

Question 6

A random walk is a:

A) random process.

B) nonrandom process.

C) nonrandom process for which the first differences are random.

D) random process for which the first differences are nonrandom.

Question 7

Which of the following statements about random walks is TRUE?

A) A random walk is a random process.

B) A random walk cannot display seasonality.

C) A random walk cannot exhibit trend.

D) All of the statements are true.

Question 8

If you wish to forecast a time series with trend, which of the following models is BEST?

A) random walk with drift

B) exponential smoother

C) regression

D) moving average

Questions 9-11:

For a large retailer, the plot below gives the sales for the first quarter of 1998 through the last quarter of 2002 in millions of dollars.

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