CH 8 - Time Series Analysis & Forecasting
1. A forecast is defined as a(n)
a. prediction of future values of a time series.
b. quantitative method used when historical data on the variable of interest are either unavailable or not
applicable.
c. set of observations on a variable measured at successive points in time.
d. outcome of a random experiment.
ANSWER: a
RATIONALE: Forecast is defined as a prediction of future values of a time series.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Time Series Analysis and Forecasting Intro, Page 381
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
2. A set of observations on a variable measured at successive points in time or over successive periods of time constitute a
a. geometric series. b. time invariant set.
c. time series. d. logarithmic series.
ANSWER: c
RATIONALE: A time series is a sequence of observations on a variable measured at successive points in
time or over successive periods of time.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: TIME SERIES PATTERNS, Page 383
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
3. Which of the following states the objective of time series analysis?
a. To predict the values of a time series based on one or more other variables.
b. To analyze the cause-and-effect relationship of a dependent variable with a time series and one or more other
variables.
c. To use present variable values to study what should have been the ideal past values.
d. To uncover a pattern in a time series and then extrapolate the pattern into the future.
ANSWER: d
RATIONALE: The objective of time series analysis is to uncover a pattern in the time series and then
extrapolate the pattern into the future.
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: Time Series Analysis and Forecasting Intro, Page 382
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
4. Which of the following is not true of a stationary time series?
a. The process generating the data has a constant mean.
b. The time series plot is a straight line.
c. The statistical properties are independent of time.
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,CH 8 - Time Series Analysis & Forecasting
d. The variability is constant over time.
ANSWER: b
RATIONALE: The term stationary time series is used to denote a time series whose statistical properties are
independent of time. In particular this means that the process of generating the data has a
constant mean and the variability of the time series is constant over time.
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: TIME SERIES PATTERNS, Page 383
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Comprehension
5. If a time series plot exhibits a horizontal pattern, then
a. it is evident that the time series is stationary.
b. the data fluctuates around the variable mean.
c. there is no relationship between time and the time series variable.
d. there is still not enough evidence to conclude that the time series is stationary.
ANSWER: d
RATIONALE: A time series plot for a stationary time series will always exhibit a horizontal pattern with
random fluctuations. However, simply observing a horizontal pattern is not sufficient
evidence to conclude that the time series is stationary.
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: TIME SERIES PATTERNS, Page 383
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Comprehension
6. Which of the following is not present in a time series?
a. seasonality
b. operational variations
c. trend
d. cycles
ANSWER: b
RATIONALE: Operational variations are not present in a time series.
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: TIME SERIES PATTERNS, Page 383
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
7. Trend refers to
a. the long-run shift or movement in the time series observable over several periods of time.
b. the outcome of a random experiment.
c. the recurring patterns observed over successive periods of time.
d. the short-run shift or movement in the time series observable for some specific period of time.
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,CH 8 - Time Series Analysis & Forecasting
ANSWER: a
RATIONALE: Trend refers to the long-run shift or movement in the time series observable over several
periods of time.
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: TIME SERIES PATTERNS, Page 385
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
8. Which is not true regarding trend patterns?
a. Can result when business conditions shift to a new level at some point in time.
b. Exist when there are gradual shifts of values over long periods of time.
c. Can result from factors such as improving technology or changes in consumer preferences.
d. Can represent non-linear relationships.
ANSWER: a
RATIONALE: A trend is usually the result of long-term factors such as population increases or decreases,
shifting demographic characteristics of the population, improving technology, changes in the
competitive landscape, and/or changes in consumer preferences. Time series may also
increase in a nonlinear fashion, meaning the percentage change from one period to the next is
relatively constant.
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: TIME SERIES PATTERNS, Pages 385-386
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
9. A time series plot of a period of time (in weeks) verses sales (in 1,000’s of gallons) is shown below. Which of the
following data patterns best describes the scenario shown?
a. Time series with a linear trend pattern b. Time series with a nonlinear trend pattern
c. Time series with no pattern d. Time series with a horizontal pattern
ANSWER: d
RATIONALE: The given scenario shows a time series plot with a horizontal pattern.
POINTS: 1
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, CH 8 - Time Series Analysis & Forecasting
DIFFICULTY: Easy
REFERENCES: TIME SERIES PATTERNS, Page 384
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
10. A time series plot of a period of time (in years) verses sales (in thousands of dollars) is shown below Which of the
following data patterns best describes the scenario shown?
a. Linear trend pattern b. Nonlinear trend pattern
c. Seasonal pattern d. Cyclical pattern
ANSWER: a
RATIONALE: The given time series plot shows a linear trend.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: TIME SERIES PATTERNS, Page 386
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
11. A time series plot of a period of time (in years) verses revenue (in millions of dollars) is shown below .Which of the
following data patterns best describes the scenario shown?
a. Linear trend pattern b. Nonlinear trend pattern
c. Seasonal pattern d. Cyclical pattern
ANSWER: b
RATIONALE: The given time series plot shows a nonlinear trend.
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1. A forecast is defined as a(n)
a. prediction of future values of a time series.
b. quantitative method used when historical data on the variable of interest are either unavailable or not
applicable.
c. set of observations on a variable measured at successive points in time.
d. outcome of a random experiment.
ANSWER: a
RATIONALE: Forecast is defined as a prediction of future values of a time series.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: Time Series Analysis and Forecasting Intro, Page 381
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
2. A set of observations on a variable measured at successive points in time or over successive periods of time constitute a
a. geometric series. b. time invariant set.
c. time series. d. logarithmic series.
ANSWER: c
RATIONALE: A time series is a sequence of observations on a variable measured at successive points in
time or over successive periods of time.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: TIME SERIES PATTERNS, Page 383
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
3. Which of the following states the objective of time series analysis?
a. To predict the values of a time series based on one or more other variables.
b. To analyze the cause-and-effect relationship of a dependent variable with a time series and one or more other
variables.
c. To use present variable values to study what should have been the ideal past values.
d. To uncover a pattern in a time series and then extrapolate the pattern into the future.
ANSWER: d
RATIONALE: The objective of time series analysis is to uncover a pattern in the time series and then
extrapolate the pattern into the future.
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: Time Series Analysis and Forecasting Intro, Page 382
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
4. Which of the following is not true of a stationary time series?
a. The process generating the data has a constant mean.
b. The time series plot is a straight line.
c. The statistical properties are independent of time.
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,CH 8 - Time Series Analysis & Forecasting
d. The variability is constant over time.
ANSWER: b
RATIONALE: The term stationary time series is used to denote a time series whose statistical properties are
independent of time. In particular this means that the process of generating the data has a
constant mean and the variability of the time series is constant over time.
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: TIME SERIES PATTERNS, Page 383
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Comprehension
5. If a time series plot exhibits a horizontal pattern, then
a. it is evident that the time series is stationary.
b. the data fluctuates around the variable mean.
c. there is no relationship between time and the time series variable.
d. there is still not enough evidence to conclude that the time series is stationary.
ANSWER: d
RATIONALE: A time series plot for a stationary time series will always exhibit a horizontal pattern with
random fluctuations. However, simply observing a horizontal pattern is not sufficient
evidence to conclude that the time series is stationary.
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: TIME SERIES PATTERNS, Page 383
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Comprehension
6. Which of the following is not present in a time series?
a. seasonality
b. operational variations
c. trend
d. cycles
ANSWER: b
RATIONALE: Operational variations are not present in a time series.
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: TIME SERIES PATTERNS, Page 383
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
7. Trend refers to
a. the long-run shift or movement in the time series observable over several periods of time.
b. the outcome of a random experiment.
c. the recurring patterns observed over successive periods of time.
d. the short-run shift or movement in the time series observable for some specific period of time.
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,CH 8 - Time Series Analysis & Forecasting
ANSWER: a
RATIONALE: Trend refers to the long-run shift or movement in the time series observable over several
periods of time.
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: TIME SERIES PATTERNS, Page 385
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
8. Which is not true regarding trend patterns?
a. Can result when business conditions shift to a new level at some point in time.
b. Exist when there are gradual shifts of values over long periods of time.
c. Can result from factors such as improving technology or changes in consumer preferences.
d. Can represent non-linear relationships.
ANSWER: a
RATIONALE: A trend is usually the result of long-term factors such as population increases or decreases,
shifting demographic characteristics of the population, improving technology, changes in the
competitive landscape, and/or changes in consumer preferences. Time series may also
increase in a nonlinear fashion, meaning the percentage change from one period to the next is
relatively constant.
POINTS: 1
DIFFICULTY: Moderate
REFERENCES: TIME SERIES PATTERNS, Pages 385-386
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
9. A time series plot of a period of time (in weeks) verses sales (in 1,000’s of gallons) is shown below. Which of the
following data patterns best describes the scenario shown?
a. Time series with a linear trend pattern b. Time series with a nonlinear trend pattern
c. Time series with no pattern d. Time series with a horizontal pattern
ANSWER: d
RATIONALE: The given scenario shows a time series plot with a horizontal pattern.
POINTS: 1
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, CH 8 - Time Series Analysis & Forecasting
DIFFICULTY: Easy
REFERENCES: TIME SERIES PATTERNS, Page 384
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
10. A time series plot of a period of time (in years) verses sales (in thousands of dollars) is shown below Which of the
following data patterns best describes the scenario shown?
a. Linear trend pattern b. Nonlinear trend pattern
c. Seasonal pattern d. Cyclical pattern
ANSWER: a
RATIONALE: The given time series plot shows a linear trend.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: TIME SERIES PATTERNS, Page 386
NATIONAL STANDARDS: United States - BUSPROG: Analytic
KEYWORDS: Bloom’s: Knowledge
11. A time series plot of a period of time (in years) verses revenue (in millions of dollars) is shown below .Which of the
following data patterns best describes the scenario shown?
a. Linear trend pattern b. Nonlinear trend pattern
c. Seasonal pattern d. Cyclical pattern
ANSWER: b
RATIONALE: The given time series plot shows a nonlinear trend.
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