The high and low values of the "ratios of actuals to moving average" are ignored when finalizing the seasonal index for a period (month or quarter)in time series decomposition.The rationale for this is to ________.
A)reduce the sample size
B)eliminate autocorrelation
C)minimize serial correlation
D)eliminate the irregular component
E)eliminate the trend

Question

Quizplus · Accepted Answer

Eliminating the irregular component is the rationale for ignoring the high and low values of the "ratios of actuals to moving average" when finalizing the seasonal index. This helps in focusing on the seasonal component by removing outliers or irregular fluctuations that do not represent the seasonal pattern.

The High and Low Values of the "Ratios of Actuals