Question

Q4

Which of the following statements are true regarding exponential smoothing and moving averages?

Multiple Choice

• Exponential smoothing gives more weight to the older observation and less weight to the recent observation.

• Moving averages looks at values for n number of periods and exponential smoothing looks at values for all periods.

• Moving averages uses past values of a time series and exponential smoothing uses future values of a time series.

• Trend and seasonality can be present in the time series.

Answer 1

1.Exponential smoothing gives more weight to the older observation and less weight to the recent observation. FALSE

Exponential moving averages  are weighted toward the most recent obseravtion with the weights decaying exponentially as the observations get older.

2.Moving averages looks at values for n number of periods and exponential smoothing looks at values for all periods. TRUE

3.Moving averages uses past values of a time series and exponential smoothing uses future values of a time series.

FALSE

4.Trend and seasonality can be present in the time series. TRUE