Tag: time series and forecasting

Questions Related to time series and forecasting

Which of the following is not one of the four types of variation that is estimated in time-series analysis?

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. Predictable

  2. Trend

  3. Cyclical

  4. Irregular

Show answer
Correct Option: A
Explanation:

Four types of variations estimated in time-series analysis are :-

1. Trend
2. Seasonal
3. Cyclical
4. Irregular

Hence, A) Predictable is the correct option

The unsystematic sequence which follows irregular pattern of variations 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. Noise

  2. Signal

  3. Linear

  4. Non-Linear

Show answer
Correct Option: A
Explanation:

By definition,
Noise is a component of time series which is the unsystematic sequence which follows irregular pattern of variations

A time series consists 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. Short-term variations

  2. Long-term variations

  3. Irregular variations

  4. All of the above

Show answer
Correct Option: D
Explanation:

$\Rightarrow$  A time series consist of $Short-term\,variations,\,Long-term\,variations\, and\, Irregular\,variation.$

$\Rightarrow$  $Short \,term\, variation -$ Seasonal trends are short term movements occurring in data due to seasonal factors. For example,  it is commonly observed that the consumption of ice-cream during summer is generally high and hence an ice-cream dealer's sales would be higher in some months of the year while relatively lower during winter months.
$\Rightarrow$  $Long\,term\, variation -$ The secular trend is the main component of a time series which results from long term effects of socio-economic and political factors. Prices and export and import data, for example, reflect obviously increasing tendencies over time.
$\Rightarrow$  $Irregular\,variation-$These are sudden changes occurring in a time series which are unlikely to be repeated. They are components of a time series. Floods, fires, earthquakes, revolutions, epidemics, strikes etc., are the root causes of such irregularities

Depression in business 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. Cyclical

  3. Seasonal

  4. Irregular

Show answer
Correct Option: B
Explanation:

$\Rightarrow$  Depression in business is : $Cyclical $.

$\Rightarrow$  Depression phase - The depression or trough is the bottom of a cycle where economic activity remains at a highly low level. Income, employment, output, price level, etc. go down. 
$\Rightarrow$  A depression is generally characterized by high unemployment of labor and capital and a low level of consumer demand in relation to the economy’s capacity to produce. 
$\Rightarrow$  This deficiency in demand forces firms to cut back production and lay-off workers.

An orderly set of data arranged in accordance with their time of occurrence 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. Arithmetic series

  2. Harmonic series

  3. Geometric series

  4. Time series

Show answer
Correct Option: D
Explanation:

From the definition of Time series,

Time series is an orderly set of data arranged in accordance with their time of occurrence.

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:

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  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.