i. Each typical seasonal index is a percent with the average for the year equal to 100. ii. The ratio-to-moving-average method eliminates the seasonal, cyclical and irregular components from the original data (y).
iii. The trend component of a time series is obtained my minimizing the sum of the squares of the errors.
A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question

Quizplus · Accepted Answer

Statement (i) is true as seasonal indices are calculated as a percentage with the average for the year equal to 100. Statement (iii) is false as the trend component of a time series is obtained through techniques like regression analysis and not by minimizing the sum of the squares of the errors. Statement (ii) is true as the ratio-to-moving-average method eliminates seasonal, cyclical, and irregular components from the original data.

I Each Typical Seasonal Index Is a Percent with the Average