You need to decide whether you should invest in a particular stock.You would like to invest if the price is likely to rise in the long run.You have data on the daily mean price of this stock over the past 12 months.Your best action is to
A) compute moving averages.
B) estimate a least square trend model.
C) perform exponential smoothing.
D) compute the MAD statistic.

Question

Quizplus · Accepted Answer

Estimating a least square trend model will give a good indication of the long-term trend of the stock price and whether it is likely to rise. Moving averages and exponential smoothing are useful for analyzing short-term fluctuations in the data. MAD statistic is useful for evaluating the accuracy of a forecast, but it does not provide information on the long-term trend of the stock price.

You Need to Decide Whether You Should Invest in a Particular