In the Context of a Fairly Stable Time Series with Relatively

question 1

Multiple Choice

In the context of a fairly stable time series with relatively little random variability, which of the following statements is true of single exponential smoothing (SES) ?

• A) Values of the smoothing constant larger than 0.5 place more emphasis on recent data.
• B) Exponential smoothing models completely forget past data if the smoothing constant is strictly between 0 and 1.
• C) Typical values for the smoothing constant are in the range of 1 to 1.5.
• D) Values of the smoothing constant smaller than 0.1 allow a forecast to react faster to changing conditions.

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Definitions:

Relationship

The manner in which two or more ideas, items, or individuals are linked, or the condition of being linked.

Variable

An attribute, characteristic, or measurement that can take on different values across individuals, objects, or time points in data collection and analysis.

Increases

A term indicating a rise or growth in a numerical value or quantity.

Scatter Diagram

A graph used in statistics to visually display and analyze the relationship between two numerical variables by plotting data points on a Cartesian plane.