As Alpha Increases the Exponential Smoothing Model

question 19

Multiple Choice

As alpha increases the exponential smoothing model

• A) produces sluggish forecasts.
• B) reacts quickly to changes in the data.
• C) reacts slowly to changes in the data.
• D) does not change.

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Definitions:

Adjusting Entry

Adjusting entries are journal entries made in accounting to update ledger accounts at the end of a reporting period, ensuring that revenues and expenses are recognized in the period they occur.

Insurance Policy

A contract between an insurer and a policyholder that specifies the terms for the payment of claims in the event of a covered loss.

Insurance Expense

The cost allocated to a period for holding insurance policies, protecting against various risks.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period of time, resulting in a net income or loss.