When the Underlying Mean of a Time Series Changes Frequently

question 137

Multiple Choice

When the underlying mean of a time series changes frequently but there is no trend,cyclical,or seasonal influence,

• A) a simple moving average forecast with n = 20 should outperform a simple moving average forecast with n = 3.
• B) a simple moving average forecast with n = 3 should outperform a simple moving average forecast with n = 20.
• C) a simple moving average forecast with n = 20 should perform about the same as a simple moving average forecast with n = 3.
• D) an exponential smoothing forecast with alpha = 0.01 should outperform a exponential smoothing forecast with alpha = 0.30.

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