Using a large value for order k in the moving averages method is effective in:
A) tracking changes in a time series more quickly.
B) smoothing out random fluctuations.
C) providing a more accurate forecast variable value.
D) eliminating the effect of seasonal variations in the time series.

Question

Quizplus · Accepted Answer

A moving average will adapt to the new level of the series and continue to provide good forecasts in k periods. Thus a smaller value of k will track shifts in a time series more quickly. On the other hand, larger values of k will be more effective in smoothing out random fluctuations.

Using a Large Value for Order K in the Moving