The fewer the periods over which one takes a moving average, the more accurately the resulting forecast mirrors the actual data of the most recent time periods.

Question

Quizplus · Accepted Answer

A moving average is a technique used in time series analysis to smooth out fluctuations in data and identify trends. The fewer the periods used in the moving average calculation, the more heavily the most recent data points are weighted in the forecast. As a result, the forecast will closely mirror the actual data of the most recent time periods. However, this also means that the forecast may be less accurate in predicting longer-term trends and patterns.

The Fewer the Periods Over Which One Takes a Moving