i. The moving average method merely smoothes out the fluctuations in the data.
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 merely smoothes out the fluctuations in the data. 
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

Statement (i) is correct as the moving average method is used to smooth out fluctuations. Statement (ii) is also correct as the moving average is often applied to data with a linear trend and rhythmic patterns. Statement (iii) is incorrect because economic and business series do not always have periods of oscillation that are of equal length or identical amplitudes.

I the Moving Average Method Merely Smoothes Out the Fluctuations