MGSC 291 Exam 3 (time series) Questions And Answers Correct Answers With Detailed Rationales.

A time series is ________. - correct answer Observations of any variable recorded over time in sequential order are considered a time series. The time period can be a year, a quarter, a month, a week, a day, or even a minute. Which of the following is an example of a time series? 1)The number of daily visitors to the Niagara Falls during the month of April. 2)The recorded exam scores of students in a class. 3)The sales prices of single family homes sold last month in Florida. 4)The current average prices of regular gasoline in different states of the U.S. - correct answer Answer: the number of daily visitors to the Niagara Falls during the month of April. Which of the following is a criticism made of qualitative forecasts? 1)They become the only possible forecast when past data are either not available or are misleading. 2)They provide no guidance on the likely effects of changes in explanatory variables. 3)They are prone to biases such as optimism and overconfidence. 4)They are difficult to document. - correct answer Answer: they are prone to biases such as optimism and overconfidence. (Although attractive in certain scenarios, qualitative forecasts are often criticized on the ground that they are prone to some well-documented biases such as optimism and overconfidence.) In which of the following situations is the use of qualitative forecasts most appropriate? 1)A marketing manager has to forecast monthly sales for the coming financial year based on the past monthly sales figures. 2)A TV network executive has to forecast viewership figures for a daily talk show based on historical data from the past on a similar show on a rival network. 3)An economist has to forecast credit flow resulting from a newly introduced stimulus package by the federal government. 4)A country's annual rate of growth for the upcoming year has to be estimated based on the annual GDP data from the last 20 years. - correct answer Answer: 3 (Qualitative forecasting is especially attractive when past data are either not available or are misleading. For instance, an economist may use qualitative forecasts of credit flow resulting from a newly introduced stimulus package by the federal government, which makes historical data irrelevant.) Which of the following is a smoothing technique? 1)Moving average methods 2)Exponential trend models 3)Polynomial trend models 4)Autoregressive models - correct answer Answer: 1 (The smoothing techniques discussed include moving average methods and exponential smoothing methods.) Which of the following is not based on a regression model? 1)Moving average methods 2)Exponential trend models 3)Polynomial trend models 4)Autoregressive models - correct answer Answer: 1 (Moving average methods are smoothing techniques, and not based on a regression model.) A time series with observed long-term upward movements in its values is said to have ________. - correct answer an increasing trend component (A times series has a trend component if one observes long-term upward or downward movements in its values. The upward movements indicate an increasing trend, that is, over the long term, the time series values increase.) Which of the following is true of the exponential smoothing m