For Which of the Following Values of the Smoothing Constant

question 32

Multiple Choice

For which of the following values of the smoothing constant w will the smoothed series catch up most quickly whenever the original time series changes direction?

• A)0.10.
• B)0.50.
• C)0.30.
• D)0.70.

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Definitions:

Semiannual Period-end Payments

Payments made twice a year, often related to financial instruments like bonds or loans.

Semiannual Interest Rate

The interest rate applied to a financial instrument such as a loan or bond twice a year.

Interest Rate

The percentage of a sum of money charged for its use, indicating the cost of borrowing money or the return on invested savings.

Compounded Annually

Refers to the process of calculating interest on both the initial principal and the accumulated interest from previous periods on an annual basis.