Below you are given the first four values of a time series. Using a 4-period moving average, the forecasted value for period 5 is
A)2.5
B)17
C)20
D)10

Question

Below you are given the first four values of a time series.  Using a 4-period moving average, the forecasted value for period 5 is
A)2.5 
B)17 
C)20 
D)10

Quizplus · Accepted Answer

To calculate the 4-period moving average, we take the average of the first four values: 
(11 + eb + 0c + 4d)/4 = 10.75 (rounded to 2 decimal places)
Since this is a moving average, we then shift one period forward and recalculate the average with the next four values: 
(eb + 0c + 4d + 41)/4 = 16.75 (rounded to 2 decimal places)
We repeat this process for each period, including period 5: 
(0c + 4d + 41 + 6f)/4 = 21.50 (rounded to 2 decimal places)
Therefore, the forecasted value for period 5 is 21.50, which is closest to answer choice C (20).

Below You Are Given the First Four Values of a Time