How are AR and exponential smoothing models similar?
A)both use only previous observations of the same variable for forecasting future values
B)both incorporate past information in the form of moving averages of multiple varaibles over time
C)both incorporate information on current values of all relevant variables
D)they generate forecasts with identically distributed expected values

Question

Quizplus · Accepted Answer

Both AR and exponential smoothing models use only previous observations of the same variable for forecasting future values. AR models use lagged values of the same variable, while exponential smoothing models use weighted averages of past observations. Neither model incorporates information on current values of other relevant variables, as in multivariate time series models. Additionally, there is no guarantee that the two models will generate forecasts with identically distributed expected values.

How Are AR and Exponential Smoothing Models Similar