A financial institution has estimated that its growth rate in deposits over the last ten years has averaged 6 percent per year.This is the _________________________ of estimating future deposits.
A)trend component
B)seasonal component
C)cyclical component
D)stationary component
E)None of the options is correct

Question

Quizplus · Accepted Answer

The growth rate in deposits over the last ten years represents a consistent trend component, as it has averaged 6 percent per year. This can be used to estimate future deposits based on the expectation that the trend will continue. The other options do not apply, as there is no indication of a repeating seasonal pattern or cyclical fluctuations, and the term stationary component is not relevant in this context.

A Financial Institution Has Estimated That Its Growth Rate in Deposits