# QMB Exam 4

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question
Time series decomposition can be used to separate or decompose a time series into all of the following components except:
horizontal patterns
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Which of the following exponential smoothing constant values puts the same weight on the most recent time series value as does a 5-period moving average?
a=.2
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The method that uses the average of the most recent k data values in the time series as the forecast for the next period is called:
moving averages
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What kind of model is appropriate if the seasonal fluctuations change over time, growing larger as the dependent variable increases because of a long-term linear trend?
multiplicative model
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A forecast model of the form Tt=b0+b1t+b2t^2 is called a(n):
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Which of the following is not present in a time series?
operational variations
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When historical data on the variable being forecast are either not applicable or unavailable, what kind of forecasting method should be used?
qualitative methods
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What forecasting method involves selecting a different weight for the most recent k data values in the time series and then computing a weighted average of the values?
Weighted moving average method
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In the linear trend equation, Tt = b0 + b1t, b0 represents the:
y-intercept of the trend line
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If the historical data are restricted to past values of the variable to be forecast, the forecasting procedure is called a:
time series method
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Suppose sales data for the first quarter had a seasonal index of .80. Which of the following statements correctly interprets this figure?
The sales average is 20% below the trend estimate.
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To model a time series with a seasonal pattern, we treat the season as a(n):
categorical variable
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When using a categorical variable in a multiple regression model that has k levels, how many dummy variables are needed?
k-1
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What forecasting method uses a weighted average of past time series values as the forecast; it is a special case of the weighted moving averages method in which we select only one weight—the weight for the most recent observation?
Exponential Smoothing
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When using a weighted moving average, if we believe that the recent past is a better predictor of the future than the distant past, we should:
give larger weights to recent observations.
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A seasonal pattern
occurs when a time series plot exhibits a repeating pattern over successive periods.
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A time series from which the effect of season has been removed by dividing each original time series observation by the corresponding seasonal index is called a:
deseasonalized time series
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A positive forecast error indicates that the forecasting method _____ the dependent variable.
underestimated
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What kind of forecasting method is based on the assumption that the variable we are forecasting has a cause-effect relationship with one or more other variables?
casual forecasting method
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The average of the sum of squared forecast errors is called:
mean squared error
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Seasonal and irregular components with values greater than 1.00 indicate effects _____ the trend estimate and values below 1.00 indicate effects _____ the trend estimate. Which two words correctly complete this sentence?
above; below
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The time series model that is appropriate in situations where the seasonal fluctuations do not depend upon the level of the time series is:
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The time series component that reflects gradual variability over a long time period is called:
a trend
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The difference between the actual time series value and the forecast is called:
forecast error
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A time series method that is used to separate or decompose a time series into seasonal, trend, and irregular components is called:
time series decomposition
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What is the component of a time series model that is attributable to multiyear cycles in the time series?
the cyclical component
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The average of the absolute values of the forecast errors is called:
mean absolute error
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The average of all the historical data will always provide the best results as long as the underlying time series is:
stationary
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If data for a time series analysis is collected on an annual basis only, which component may be ignored?
seasonal
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Time series regression refers to the use of regression analysis when the independent variable is:
time
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Three of the following forecasting methods are appropriate for a time series with a horizontal pattern. Which one is not appropriate for a time series with a horizontal pattern?