If it is suspected that the major influence in a stationary time series is random variation, the preferable forecasting technique would be the:
A)classical decomposition.
B)moving average method.
C)Holt's linear exponential smoothing technique.
D)linear regression.

Question

Quizplus · Accepted Answer

If the major influence in a stationary time series is random variation, the preferable forecasting technique would be the moving average method. This method takes the average of a specific number of past observations, and uses it to forecast future values. Since the major influence is random variation, using an average of past observations would help to smooth out the randomness and provide a more accurate forecast.

If It Is Suspected That the Major Influence in a Stationary