I the Irregular Component of a Time Series Is the Easiest

question 40

Multiple Choice

i. The irregular component of a time series is the easiest to measure. ii. The ratio-to-moving average method removes the time series trend component, resulting in 12 numbers that are called specific seasonals.
iii. For a quarterly time series, the initial step, using the ratio-to-moving average method, is to remove the seasonal components from the time series using a 3-month centered moving average.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) and (ii) are incorrect statements but (iii) is correct.
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) and (iii) are correct statements but not (i).
• E) (i), (ii), and (iii) are all false statements.

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Definitions:

Permanent Accounts

Financial statement accounts whose balances are carried over into the next accounting period.

Temporary Accounts

These include accounts that are closed at the end of each accounting period, including income, expense, and withdrawal accounts.

Carried Forward

The act of transferring a balance from one period to the next on financial statements or ledgers.

Owners' Equity

The total value belonging to the owners of a company, calculated as the company's total assets minus its total liabilities, indicative of the net worth.