The Purpose of Computing Moving Averages and Centred Moving Averages

question 44

True/False

The purpose of computing moving averages and centred moving averages is to eliminate seasonal variations and irregular component from time series data.

---

Definitions:

Deviations

Statistical variances or differences from a central value, such as the mean, indicating how spread out data points are.

Mean

A statistical measure of central tendency, commonly understood as the average value of a set of numbers.

Expected Return

The anticipated amount of gain or loss that an investor can expect from an investment, based on historical or projected returns.

Real Return

The profit or loss on an investment adjusted for inflation, reflecting the actual purchasing power of the return.