Suppose That You Are Using the Four-Period Simple Moving Average

question 135

Multiple Choice

Suppose that you are using the four-period simple moving average method to forecast sales, and sales have been increasing by 20% every period. How will your forecasts perform?

• A) Forecasts will be lower than actual.
• B) Forecasts will be higher than actual.
• C) Forecasts will equal actual.
• D) Forecasts will be decreasing.
• E) Forecasts will be increasing by 5.0% every period.

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Definitions:

Sample Scores

Quantitative values or measurements obtained from a subset of a population for research or analysis purposes.

Representative

Something, such as a person or sample, that accurately reflects the larger group or whole it is intended to stand in for.

Sample Statistics

Numerical data that describe characteristics of a sample, a subset of the population being studied.

Population Parameters

Statistical measures that describe characteristics of a population, such as the mean (average), median, mode, and standard deviation.