BUSINESS ADMINISTRATION
BUSINESS ANALYTICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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error tolerance
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compensation for forecasting error
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number of time series values under consideration
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number of samples in each unit time period
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Detailed explanation-1: -For a simple moving average, the smoothness of a curve is determined by the number of time points, k, that is used to compute the moving average. Small values of k result in curves that reflect the short-term ups and downs of the data; large values of k undulate less.
Detailed explanation-2: -A moving average is defined as an average of fixed number of items in the time series which move through the series by dropping the top items of the previous averaged group and adding the next in each successive average.
Detailed explanation-3: -A moving average of order m can be written as ^Tt=1mk∑j=−kyt+j, (6.1) (6.1) T ^ t = 1 m ∑ j = − k k y t + j, where m=2k+1 m = 2 k + 1 . That is, the estimate of the trend-cycle at time t is obtained by averaging values of the time series within k periods of t .
Detailed explanation-4: -Moving averages are calculated to identify the trend direction of a stock or to determine its support and resistance levels. It is a trend-following or lagging, indicator because it is based on past prices. The longer the period for the moving average, the greater the lag.