Question

Concept / meaning
- term in econometrics
- one term needs around 5 explanation (Meaning, application, example, etc)

Answer 1

Least Squares method is a mathematical regression analysis to find the line of best fit for a dataset, based on the visual demonstration of the relationship between the various data points. Application of least squares method is to create a straight line that minimizes the sum of the squares of the errors which took place due to the results of the associated equations.

For example, In order to find out the relationship between the company's stock returns and the returns of the index being stock a component, least squares method is used.

Moving average method is a demand forecasting method to find out the demand of the upcoming year based on past year sales record. Its application is to forecast about the future.

For example, in order to find out the sales of the upcoming year 2019, the average of the past three years sales record is being taken and projected for the upcoming year 2019.