A time series obtained from quarterly data exhibits an increasing linear trend and constant seasonal variation.The most appropriate way to model this time series would be to use
A)simple exponential smoothing.
B)multiplicative decomposition.
C)a multiple regression model with four predictor variables;one for time and three dummy variables.
D)Holt-Winters' double exponential smoothing model.
E)the Durbin-Watson statistic.

Question

Quizplus · Accepted Answer

A multiple regression model with one predictor for time (to capture the linear trend) and three dummy variables (to capture the constant seasonal variation) is appropriate for modeling a time series with these characteristics.

A Time Series Obtained from Quarterly Data Exhibits an Increasing