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

question 18

Multiple Choice

Suppose that you are using the four-period simple moving average method to forecast sales, and sales have been increasing by 40% every period. How will your forecasts perform?

• A) Forecasts will be increasing by 40.0% every period.
• B) Forecasts will be higher than actual.
• C) Forecasts will equal actual.
• D) Forecasts will be decreasing.
• E) Forecasts will be increasing by 10.0% every period.

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