Exhibit 17-1
Below you are given the first five values of a quarterly time series. The multiplicative model is appropriate and a four-quarter moving average will be used.
-Refer to Exhibit 17-1. An estimate of the trend component times the cyclical component (T₂C_t) for Quarter 3 of Year 1, when a four-quarter moving average is used, is

Question

Exhibit 17-1
Below you are given the first five values of a quarterly time series. The multiplicative model is appropriate and a four-quarter moving average will be used. Exhibit 17-1 Below you are given the first five values of a quarterly time series. The multiplicative model is appropriate and a four-quarter moving average will be used. -Refer to Exhibit 17-1. An estimate of the trend component times the cyclical component (T<sub>2</sub>C<sub>t</sub>) for Quarter 3 of Year 1, when a four-quarter moving average is used, is A) 24 B) 25 C) 26 D) 28

-Refer to Exhibit 17-1. An estimate of the trend component times the cyclical component (T₂C_t) for Quarter 3 of Year 1, when a four-quarter moving average is used, is

Quizplus · Accepted Answer

The trend component for Quarter 3 of Year 1 can be estimated using a four-quarter moving average: T3 = (Y1Q2 + Y1Q3 + Y1Q4 + Y2Q1) / 4 = (22 + 24 + 23 + 25) / 4 = 24 The cyclical component for Quarter 3 of Year 1 can be calculated as the ratio of the actual value to the estimated trend: C3 = Y1Q3 / T3 = 26 / 24 = 1.0833 Therefore, the estimate of the trend component times the cyclical component for Quarter 3 of Year 1 is: T₂C_t = T3 * C3 = 24 * 1.0833 ≈ 25 The closest answer choice is B, so the best choice is B.

Exhibit 17-1 Below You Are Given the First Five Values of a of a Quarterly