i. The moving average method averages out cyclical (C) and irregular (I) components.
ii. To apply the moving average method to a time series, the data should follow a linear trend and have a definite rhythmic pattern of fluctuations that repeat (say, every three years).
iii. Sales, production and other economic and business series usually have periods of oscillation that are of equal length or identical amplitudes.
A) (i), (ii) and (iii) are all correct statements
B) (i) and (ii) are correct statements, but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) All statements are false

Question

i. The moving average method averages out cyclical (C) and irregular (I) components. 
ii. To apply the moving average method to a time series, the data should follow a linear trend and have a definite rhythmic pattern of fluctuations that repeat (say, every three years).
iii. Sales, production and other economic and business series usually have periods of oscillation that are of equal length or identical amplitudes.
A) (i), (ii) and (iii) are all correct statements
B) (i) and (ii) are correct statements, but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) All statements are false

Quizplus · Accepted Answer

The moving average method smooths out cyclical and irregular components (i). For (ii), moving averages are used to smooth data, not necessarily requiring a linear trend or rhythmic pattern. (iii) is incorrect as economic series do not always have equal oscillation periods or amplitudes.

I the Moving Average Method Averages Out Cyclical (C) and Irregular