The model that assumes the time-series value at time t is the sum of the four time-series components is referred to as the:
A)additive model.
B)multiplicative model.
C)moving averages model.
D)forecast model.

Question

Quizplus · Accepted Answer

The additive model assumes that the time-series value at time t is the sum of its four components: the overall mean or intercept, the trend component, the seasonal component, and the residual component. This is the most commonly used forecasting model and is appropriate for time series where the magnitude of the seasonal fluctuations or noise is constant over time.

The Model That Assumes the Time-Series Value at Time T