A moving average model works best when ____ in the time series.
A)Only irregular variation is present
B)Only a trend is present
C)There is no trend, seasonal, or cyclical pattern
D)Trend, seasonal, and cyclical patterns all exist

Question

Quizplus · Accepted Answer

A moving average model is designed to capture the underlying trend and smooth out the irregular variation in the time series. It does not work well when there are significant seasonal or cyclical patterns present, as these cannot be captured by a simple average of past values. Therefore, the best choice for a moving average model is when there is no trend, seasonal, or cyclical pattern in the time series.

A Moving Average Model Works Best When ____ in the Time