Which of the following is true about deseasonalizing data?
A) The sum of the seasonal indexes should be 1.0.
B) The time series is deseasonalized by multiplying each value by its seasonal index.
C) Deseasonalizing a time series reduces autocorrelation.
D) Deseasonalizing a time series can make it easier to see a trend.

Question

Quizplus · Accepted Answer

Deseasonalizing a time series removes the seasonal component of the data, making it easier to identify and analyze underlying trends. This process does not involve multiplying values by their seasonal index (that's part of the seasonal adjustment process) nor does it necessarily reduce autocorrelation directly. The sum of seasonal indexes over one cycle should equal the number of periods in the cycle, not necessarily 1.0.

Which of the Following Is True About Deseasonalizing Data