The model that assumes that the actual time series value is the product of its components is the
A)forecast time series model
B)multiplicative time series model
C)additive time series model
D)None of these alternatives is correct.

Question

Quizplus · Accepted Answer

The multiplicative time series model assumes that the actual time series value is the product of its components, including seasonal, trend, cyclical, and irregular components. This is expressed as Y = T x S x C x I, where Y is the observed value of the time series, T is the trend component, S is the seasonal component, C is the cyclical component, and I is the irregular component. In contrast, the additive time series model assumes that the actual time series value is the sum of its components.

The Model That Assumes That the Actual Time Series Value