Selecting a large the number of periods (N)for a centered moving average
A) results in greater dampening.
B) is less responsive to directional changes.
C) results in a more accurate forecast.
D) both A and B.
E) All of the above.

Question

Quizplus · Accepted Answer

Selecting a larger number of periods for a centered moving average will result in greater dampening (choice A) and a less responsive forecast to directional changes (choice B). This is because the larger the value of N, the more data points are being averaged and the smoother the forecast. However, a smoother forecast may not be as accurate (choice C) as it may miss sudden changes in the data. Therefore, the best choice(s) for selecting a large number of periods for a centered moving average would be D, as it accurately reflects the effects of a higher N value.

Selecting a Large the Number of Periods (N)for a Centered