Tag: moving averages

Questions Related to moving averages

Barometric methods are used to forecast

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. seasonal variation.

  2. secular trend.

  3. cyclical variation.

  4. irregular variation.

Show answer
Correct Option: C
Explanation:

Its a fact. Barometric methods are used to forecast cyclical variation.

If $A : B =3 : 4$ and $B : C =5 : 6$, then $A : C$ 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. $7:3$

  2. $3:4$

  3. $1:2$

  4. $5:9$

Show answer
Correct Option: D
Explanation:

$A:B=3:4$
 $B:C=5:6$
 $\therefore \frac { A }{ B } =\frac { 3 }{ 4 } & \frac { B }{ C } =\frac { 5 }{ 6 } $
 $\therefore \frac { A }{ B } \times \frac { B }{ C } =\frac { A }{ C } $
$\therefore \frac { 3 }{ 4 } \times \frac { 5 }{ 6 } =A:C$
 $=\frac { 15 }{ 24 } =\frac { 5 }{ 8 } $
A:C=5:8

A pattern that is repeated throughout a time series and has a recurrence period of at most one year is called

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. Cyclical variation

  2. Irregular variation

  3. Seasonal variation

  4. Long term variation

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  A pattern that is repeated throughout a time series and has a recurrence period of at most one year is called $Seasonal\, variation$.

$\Rightarrow$  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.
$\Rightarrow$   These variations may be also due to man-made conventions & due to habits, customs or traditions. For example, sales might go up during Diwali & Christmas or sales of restaurants & eateries might go down during Navratri’s.

Increase in the number of patients in the hospital due to heat stroke 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. Secular trend

  2. Irregular variation

  3. Seasonal variation

  4. Cyclical variation

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  Increase in the number of patients in the hospital due to heat stroke is : $Seasonal\, variation.$

$\Rightarrow$  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.
$\Rightarrow$  It is common knowledge that the value of many variables depends in part on the time of year.
$\Rightarrow$  Increase in number of  Heat stroke is one of example of seasonal variation because it's happens in every year in summer.

A complete cycle consists of a period of:

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. Prosperity and depression

  2. Prosperity and recovery

  3. Prosperity and recession

  4. Recession and recovery

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  A complete cycle consist of period of : $Prosperity\, and\, recession$.

$\Rightarrow$  $Prosperity\,phase$ : When there is an expansion of output, income, employment, prices and profits, there is also a rise in the standard of living. This period is termed as Prosperity phase.
$\Rightarrow$  $Recession Phase$ : The turning point from prosperity to depression is termed as Recession Phase.
During a recession period, the economic activities slow down. When demand starts falling, the overproduction and future investment plans are also given up. There is a steady decline in the output, income, employment, prices and profits. 

The general pattern of increase or decrease in economics or social phenomena is shown by:

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. Seasonal trend

  2. Cyclical trend

  3. Secular trend

  4. Irregular trend

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  The general pattern of increase or decrease in economics or social phenomena is shown by : $Secular\, trend$.

$\Rightarrow$  Term tendency of the time series to move in an upward or down ward direction. It indicates how on the whole, it has behaved over the entire period under reference.
$\Rightarrow$  These are result of long-term forces that gradually operate on the time series variable. A general tendency of a variable to increase, decrease or remain constant in long term.
$\Rightarrow$  Secular trend is be long-term tendency of the time series to move on upward or downward direction. It indicates how on the whole behaved over the entire period under reference.

Secular trend can be measured by:

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. Two methods

  2. Three methods

  3. Four methods

  4. Five methods

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  Secular trend can be measured by: $Four\, methods.$

$\Rightarrow$  The four methods are: 
$(1)$  Graphic or a Freehand Curve Method.
$(2)$  Method of Semi Averages.
$(3)$  Method of Moving Averages.
$(4)$  Method of Least Squares.

Damages due to floods, droughts, strikes fires and political disturbances are:

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. Trend

  2. Seasonal

  3. Cyclical

  4. Irregular

Show answer
Correct Option: D
Explanation:

$\Rightarrow$  Damages due to floods, drought, strikes fires and political disturbances are : $Irregular$.

$\Rightarrow$  Irregular variations which occur on account of random external events.
$\Rightarrow$  These variations either go very deep downward or too high upward to attain peaks abruptly. These fluctuations are a result of unforeseen and unpredictably forces which operate in absolutely random or erratic manner.
$\Rightarrow$  These variations are due to floods, wars, famines, earthquakes, strikes, lockouts, epidemics etc.

The method of moving average is used to find the:

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. Secular trend

  2. Seasonal variation

  3. Cyclical variation

  4. Irregular variation

Show answer
Correct Option: A
Explanation:

$\Rightarrow$  The method of moving average is used to find the : $Secular\, trend.$

$\Rightarrow$  A moving average is an average (Arithmetic mean) of fixed number of items (known as periods) which moves through a series by dropping the first item of the previously averaged group and adding the next item in each successive average.
$\Rightarrow$   The value so computed is considered the trend value for the unit of time falling at the center of the period used in the calculation of the average.

A complete cycle passes through:

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. Two stages

  2. Three stages

  3. Four stages

  4. Difficult to tell

Show answer
Correct Option: C
Explanation:

$\Rightarrow$  A complete cycle passes through : $Four\, stages$.

$\Rightarrow$  Four stages are : 

$(1)$  Prosperity Stage : Expansion or Boom or Upswing of economy.
$(2)$  Recession Stage : from prosperity to recession (upper turning point).
$(3)$  Depression Stage : Contraction or Downswing of economy.
$(4)$  Recovery Stage : from depression to prosperity (lower turning Point).