For a quarterly time series with a strong seasonal pattern, which of the following moving averages should be used to estimate the trend?Group of answer choicesa centred 5-point moving averagea 4-point moving averagea 2x4-point moving averagea centred 7-point moving average
Question
For a quarterly time series with a strong seasonal pattern, which of the following moving averages should be used to estimate the trend?Group of answer choicesa centred 5-point moving averagea 4-point moving averagea 2x4-point moving averagea centred 7-point moving average
Solution
A 4-point moving average should be used to estimate the trend for a quarterly time series with a strong seasonal pattern. This is because a 4-point moving average will take into account each season of the year (since a year has 4 quarters), thus effectively capturing the seasonal pattern in the data.
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