Question 1

Exponential smoothing and moving averages are especially useful for data with a clear trend.

Accepted Answer

A) True 
 B)False

Question 2

In exponential smoothing, using α = .20 will provide less smoothing than using α = .10.

Accepted Answer

A) True 
 B)False

Question 3

The four components of a time series are which of the following?

Accepted Answer

A) Cycle, season, month, day 
B) Month, cycle, seasonal, irregular 
C) Cycle, seasonal, irregular, regular 
D) Seasonal, cycle, irregular, trend 
A) Cycle, season, month, day 
B) Month, cycle, seasonal, irregular 
C) Cycle, seasonal, irregular, regular 
D) Seasonal, cycle, irregular, trend

Question 4

Which of the following measures of fit is unit free?

Accepted Answer

A) MAD (mean absolute deviation) 
B) SE (standard error) 
C) MSD (mean squared deviation) 
D) R2 (coefficient of determination) 
A) MAD (mean absolute deviation) 
B) SE (standard error) 
C) MSD (mean squared deviation) 
D) R2 (coefficient of determination)

Question 5

The time-series model Y = T × C × S × I:

Accepted Answer

A) is an additive model. 
B) is a multiplicative model. 
C) is an exponential model. 
D) is a polynomial model. 
A) is an additive model. 
B) is a multiplicative model. 
C) is an exponential model. 
D) is a polynomial model.

Question 6

Which trend would you choose to forecast the number of water damage claims in 2010?

Accepted Answer

A) Exponential model. 
B) Polynomial model. 
C) They are equivalent. 
A) Exponential model. 
B) Polynomial model. 
C) They are equivalent.

Question 7

A quadratic trend equation yt = 900 + 30t - 2.5t2 was fitted to a company's sales. This result implies that the sales trend:

Accepted Answer

A) hit a maximum in period t = 30. 
B) hit a maximum in period t = 6. 
C) hit a minimum in period t = 5. 
D) hit a minimum in period t = 6. 
A) hit a maximum in period t = 30. 
B) hit a maximum in period t = 6. 
C) hit a minimum in period t = 5. 
D) hit a minimum in period t = 6.

Question 8

Which data would be measured over an interval of time as opposed to at a point in time?

Accepted Answer

A) Toyota's accounts receivable on December 31, 2011 
B) Costco's sales for fiscal year 2010 
C) The Canadian unemployment rate on December 1, 2010 
D) The closing price of Wal-Mart's stock last Friday 
A) Toyota's accounts receivable on December 31, 2011 
B) Costco's sales for fiscal year 2010 
C) The Canadian unemployment rate on December 1, 2010 
D) The closing price of Wal-Mart's stock last Friday

Question 9

A firm's balance sheet contains data measured over a period of time, as opposed to being measured at a point in time.

Accepted Answer

A) True 
 B)False

Question 10

Averaging the first six data values is a way of initializing the forecasts in an exponential smoothing process.

Accepted Answer

A) True 
 B)False

Question 11

Bob collected data on U.S. consumer bankruptcies and performed the trend analysis shown below. Describe the data and discuss his fitted trend's adequacy for making a three-year forecast. What trend alternative(s), if any, might be preferred? Explain your reasoning.

Accepted Answer

The linear model predicts 80,482 additio

Question 12

If a fitted trend equation is yt = 120 - 40t + 2.5t2, then the turning point will be:

Accepted Answer

A) a peak in period 40. 
B) a trough in period 5. 
C) a peak in period 4. 
D) a trough in period 8. 
A) a peak in period 40. 
B) a trough in period 5. 
C) a peak in period 4. 
D) a trough in period 8.

Question 13

Fluctuations caused by strikes and floods are:

Accepted Answer

A) cyclical fluctuations. 
B) irregular fluctuations. 
C) residual fluctuations. 
D) seasonal fluctuations. 
A) cyclical fluctuations. 
B) irregular fluctuations. 
C) residual fluctuations. 
D) seasonal fluctuations.

Question 14

Occam's Razor says always to choose the simplest model.

Accepted Answer

A) True 
 B)False

Question 15

The estimated regression equation is yt = 448 + 12t + 18 Qtr1 - 26 Qtr2 + 3 Qtr3. The regression model has three quarterly binaries. The model was fitted to 12 periods of quarterly data starting with the first quarter. Why is there no fourth quarterly binary for Qtr4?

Accepted Answer

A) Because the researcher made a mistake. (We must include a binary for each quarter.) 
B) Because it is unnecessary. (Its value is implied by the other three binaries.) 
C) Because the fourth quarter binary is assumed to be the same as the first quarter. 
D) Because there is no seasonality in the fourth quarter in most time series. 
A) Because the researcher made a mistake. (We must include a binary for each quarter.) 
B) Because it is unnecessary. (Its value is implied by the other three binaries.) 
C) Because the fourth quarter binary is assumed to be the same as the first quarter. 
D) Because there is no seasonality in the fourth quarter in most time series.

Question 16

For these data, what is the three-period centered moving average for period 4? $$\begin{array} { | c | c | c | c | c | c | c | c | c | c | } 
\hline t & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 \
\hline y _ { t } & 22 & 33 & 27 & 34 & 38 & 26 & 28 & 35 & 41 \
\hline
\end{array}$$

Accepted Answer

A) 33.33 
B) 31.33 
C) 33.00 
D) 34.00 
A) 33.33 
B) 31.33 
C) 33.00 
D) 34.00

Question 17

Which trend would you choose to forecast the number of tractors sold in 2010?

Accepted Answer

A) Linear model. 
B) Polynomial model. 
C) The forecasts are equivalent. 
A) Linear model. 
B) Polynomial model. 
C) The forecasts are equivalent.

Question 18

Moving averages are often used for making long-term forecasts (e.g., five periods ahead).

Accepted Answer

A) True 
 B)False

Question 19

The fitted sales trend over the last 12 years is yt = 14.7e0.063t. We can say that:

Accepted Answer

A) sales grew (on average) at 63 percent per annum. 
B) sales in year 10 would be about 39. 
C) a continuously compounded model was used. 
D) sales in year 1 were 14.7. 
A) sales grew (on average) at 63 percent per annum. 
B) sales in year 10 would be about 39. 
C) a continuously compounded model was used. 
D) sales in year 1 were 14.7.

Question 20

Over long periods of time, multiplicative time-series models may be favored over additive time-series models, because the data magnitude often changes over time.

Accepted Answer

A) True 
 B)False

Exponential smoothing and moving averages are especially useful for data with a clear trend.

In exponential smoothing, using α = .20 will provide less smoothing than using α = .10.

The four components of a time series are which of the following?

Which of the following measures of fit is unit free?

The time-series model Y = T × C × S × I:

Which trend would you choose to forecast the number of water damage claims in 2010?

A quadratic trend equation y_t = 900 + 30t - 2.5t² was fitted to a company's sales. This result implies that the sales trend:

Which data would be measured over an interval of time as opposed to at a point in time?

A firm's balance sheet contains data measured over a period of time, as opposed to being measured at a point in time.

Averaging the first six data values is a way of initializing the forecasts in an exponential smoothing process.

Bob collected data on U.S. consumer bankruptcies and performed the trend analysis shown below. Describe the data and discuss his fitted trend's adequacy for making a three-year forecast. What trend alternative(s), if any, might be preferred? Explain your reasoning.

If a fitted trend equation is y_t = 120 - 40t + 2.5t², then the turning point will be:

Fluctuations caused by strikes and floods are:

Occam's Razor says always to choose the simplest model.

The estimated regression equation is y_t = 448 + 12t + 18 Qtr1 - 26 Qtr2 + 3 Qtr3. The regression model has three quarterly binaries. The model was fitted to 12 periods of quarterly data starting with the first quarter. Why is there no fourth quarterly binary for Qtr4?

For these data, what is the three-period centered moving average for period 4? t 1 2 3 4 5 6 7 8 9 22 33 27 34 38 26 28 35 41

Which trend would you choose to forecast the number of tractors sold in 2010?

Moving averages are often used for making long-term forecasts (e.g., five periods ahead).

The fitted sales trend over the last 12 years is y_t = 14.7e^0.063^t. We can say that:

Over long periods of time, multiplicative time-series models may be favored over additive time-series models, because the data magnitude often changes over time.

Overview of Statistics

Data Collection

Describing Data Visually

Descriptive Statistics

Probability

Discrete Probability Distributions

Continuous Probability Distributions

Sampling Distributions and Estimation

One-Sample Hypothesis Tests

Two-Sample Hypothesis Tests

Analysis of Variance

Simple Regression

Multiple Regression

Chi-Square Tests

Nonparametric Tests

Quality Management

Filters

Exam 14: Time Series Analysis

Exponential smoothing and moving averages are especially useful for data with a clear trend.

In exponential smoothing, using α = .20 will provide less smoothing than using α = .10.

The four components of a time series are which of the following?

Which of the following measures of fit is unit free?

The time-series model Y = T × C × S × I:

Which trend would you choose to forecast the number of water damage claims in 2010?

A quadratic trend equation yt = 900 + 30t - 2.5t2 was fitted to a company's sales. This result implies that the sales trend:

Which data would be measured over an interval of time as opposed to at a point in time?

A firm's balance sheet contains data measured over a period of time, as opposed to being measured at a point in time.

Averaging the first six data values is a way of initializing the forecasts in an exponential smoothing process.

Bob collected data on U.S. consumer bankruptcies and performed the trend analysis shown below. Describe the data and discuss his fitted trend's adequacy for making a three-year forecast. What trend alternative(s), if any, might be preferred? Explain your reasoning.

If a fitted trend equation is yt = 120 - 40t + 2.5t2, then the turning point will be:

Fluctuations caused by strikes and floods are:

Occam's Razor says always to choose the simplest model.

The estimated regression equation is yt = 448 + 12t + 18 Qtr1 - 26 Qtr2 + 3 Qtr3. The regression model has three quarterly binaries. The model was fitted to 12 periods of quarterly data starting with the first quarter. Why is there no fourth quarterly binary for Qtr4?

For these data, what is the three-period centered moving average for period 4? t 1 2 3 4 5 6 7 8 9 22 33 27 34 38 26 28 35 41

Which trend would you choose to forecast the number of tractors sold in 2010?

Moving averages are often used for making long-term forecasts (e.g., five periods ahead).

The fitted sales trend over the last 12 years is yt = 14.7e0.063t. We can say that:

Over long periods of time, multiplicative time-series models may be favored over additive time-series models, because the data magnitude often changes over time.

Overview of Statistics

Data Collection

Describing Data Visually

Descriptive Statistics

Probability

Discrete Probability Distributions

Continuous Probability Distributions

Sampling Distributions and Estimation

One-Sample Hypothesis Tests

Two-Sample Hypothesis Tests

Analysis of Variance

Simple Regression

Multiple Regression

Chi-Square Tests

Nonparametric Tests

Quality Management

Filters

A quadratic trend equation y_t = 900 + 30t - 2.5t² was fitted to a company's sales. This result implies that the sales trend:

If a fitted trend equation is y_t = 120 - 40t + 2.5t², then the turning point will be:

The estimated regression equation is y_t = 448 + 12t + 18 Qtr1 - 26 Qtr2 + 3 Qtr3. The regression model has three quarterly binaries. The model was fitted to 12 periods of quarterly data starting with the first quarter. Why is there no fourth quarterly binary for Qtr4?

The fitted sales trend over the last 12 years is y_t = 14.7e^0.063^t. We can say that: