In the exponential smoothing formula for updating the level of the series, , what does α represent?
A) The weighted average of the exponentially declining weights.
B) The speed of decline in the weights of older observations.
C) The initial value of the time series.
D) The last value of the time series.

Question

In the exponential smoothing formula for updating the level of the series,  , what does α represent?
A) The weighted average of the exponentially declining weights. 
B) The speed of decline in the weights of older observations. 
C) The initial value of the time series. 
D) The last value of the time series.

Quizplus · Accepted Answer

α represents the speed of decline in the weights of older observations in the exponential smoothing formula for updating the level of the series.

In the Exponential Smoothing Formula for Updating the Level of the Series