If a researcher is using exponential smoothing and determines that the forecast for the next period (F_{t + 1})is the weighted average of the actual value for the previous period (X_t)and the forecast value for the previous period (F_t), with weights of 1 and 3 respectively, then α = ______. A)0.25 B)0.33 C)0.67 D)0.75 E)0.90

Question

Quizplus · Accepted Answer

The weight for the actual value is 1 and for the forecast value is 3, making the total weight 1 + 3 = 4. The weight of the actual value (1) as a fraction of the total weight (4) is 1/4 = 0.25, which means α = 0.25.

If a Researcher Is Using Exponential Smoothing and Determines That