Lecture 3- Decomposition

Which is the seasonality for daily data?

• 7
• 365
• 7 or 365 it depends
• 24

Which is the best choice for smoothing and reduce random variation?

• ma(3x3)
• ma(5x3)
• ma(3x5)
• ma(5x5)

Centre 12 -  ma could be used with monthly data and each month would would be given equal weight. Similarly, a 2x24 or 2x36 would give equal weigths to all months and produce a smoother fit than the 2x12MA. 

• true
• false

In case of a seasonal quarterly data (observations per 3 months), which is the best choice for moving average to eliminate seasonality?

• centre moving average (4)
• ma(3)
• weighted moving average (0.125, 0.25, 0.25, 0.25, 0.125)
• centre moving average (4) or weighted moving average (0.125, 0.25, 0.25, 0.25, 0.125)

Which is moving average's objective?

• forecasting
• smoothing
• estimate trend & cycle
• all the above options

Which of the following is a measure of bias? 

• Mean Absolute Error (MAE) 
• Mean Squares Error (MSE)
• Mean Error (ME)
• Mean Absolute Percntage Error (MAPE)

What does it mean for a forecast model that forecast ME=14 units & MAE=14 units as well

• forecast model is accurate
• Forecast model has no bias
• forecast model is optimistic (biased)
• forecast model is pessimistic (biased)