Each next period's forecast is updated from the last period's forecast by dropping the value of the oldest period of the series _____ and adding the latest observation,which is _____.
A)xt + 1; xt - N + 1
B)xt - N + 1;xt + 1
C)xt + N - 1;xt + 1
D)xt - N + 1;xt - 1

Question

Quizplus · Accepted Answer

The method described is a simple moving average where the forecast for the next period (xt+1) is updated by dropping the oldest observation (xt-N+1) and adding the latest observation (xt). Therefore, the correct choice is B where xt-N+1 represents the oldest observation and xt+1 represents the updated forecast.

Each Next Period's Forecast Is Updated from the Last Period's