If We Use a Value Close to 1 for the Smoothing

question 41

True/False

If we use a value close to 1 for the smoothing constant $a$
in a simple exponential smoothing model,then we expect the model to respond very slowly to changes in the level.

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Definitions:

Accrued Interest

The interest on a loan or bond that has accumulated since the principal investment, or since the last interest payment, if there has been one already.

Using Sinking Fund

The practice of setting aside money over time into a separate account to repay debt or replace a major asset in the future, thus avoiding a large lump-sum expense.

Market Value

Market value is the amount for which something can be sold in a given market at a particular time.

Redemption Value

The price per share a corporation pays to redeem or retire capital stock.