When computing moving averages for quarterly sales data,a ______ period moving average is used.
A)2
B)3
C)4
D)5
E)8

Question

Quizplus · Accepted Answer

Quarterly sales data involves periods of 3 months. Therefore, a 4 period moving average (also known as a "4-quarter moving average") would be appropriate for smoothing the data and identifying trends over time. Using a smaller period moving average, such as 2 or 3, may not provide enough smoothing and could result in a more volatile trend line. A larger period moving average, such as 5 or 8, may smooth the data too much and possibly mask important variations in the data.

When Computing Moving Averages for Quarterly Sales Data,a ______ Period