Fill in the blank: The four main components of time series analysis are trend, seasonal variations, cyclic variations, and ___ movements.

Random

True or False: Seasonal variations in a time series occur over a long period, typically exceeding one year.

False. Seasonal variations occur in a regular and periodic manner over a span of less than a year.

What does the term 'stationarity' refer to in the context of time series?

Stationarity refers to a time series whose mean and variance remain constant over time, indicating that past effects do not accumulate indefinitely.

Rt

B) They occur regularly every year.

What is the significance of the 'business cycle' in time series analysis?

The business cycle impacts economic analysis.

• Indicates economic trends over time.

• Helps forecast future economic activity.

• Affects policy and investment decisions.

Describe the process of decomposition in time series analysis.

Decomposition separates time series components.

• Identifies trend over time.

• Analyzes seasonal patterns.

• Separates irregular fluctuations.

True or False: The method of least squares ensures that the sum of vertical deviations from the fitted line equals zero.

True.

What is the role of 'exponential smoothing' in time series forecasting?

Exponential smoothing forecasts future values.

• Averages past data points.

• Weights recent observations more.

• Accounts for trends and seasonality.

What does a time series depict in relation to two variables?

A time series shows variable changes.

• Tracks trends over intervals.

• Visualizes data correlations.

• Useful for forecasting patterns.