Question 1

Part A

How many statements are correct about a moving average (MA) with a window of three? (A) 0 (B) 1 (C) 2 (D) 3 (E) 4

Statement 1. Using moving average assumes only a random component.

Statement 2. The parameters for a moving average technique is the intercept and slope.

Statement 3. Using MA3 averages any three values in a time series.

Statement 4. The value from a moving average technique is an estimate of the stationary mean.

Part B)

How many statements are correct about the regression forecasting technique? (A) 0 (B) 1 (C) 2 (D) 3 (E) 4

Statement 1. Regression is a technique of preference for a non-stationary time series.

Statement 2. The parameter for regression is the window.

Statement 3 A regression trend line can have a positive or negative slope.

Statement 4. Variability due to the non-stationary nature of the time series is a trend component. Unexplained variability around the trend line is a random component.

Part C)

How many statements are correct about the seasonal index forecasting technique? (A) 0 (B) 1 (C) 2 (D) 3 (E) 4

Statement 1. The seasonal index approach can be used for quarterly, monthly, or weekly time series.

Statement 2. The seasonal index approach can obtain forecasts without seasonal indexes.

Statement 3. The seasonal index approach can be used for a cyclical component.

Statement 4. For seasonal and random components, the variability within a year is seasonal and the variability between the years is random.