Consider the following to answer the question(s) below:
A third-order autoregressive model, AR (3) was fit to monthly closing stock prices, adjusted for dividends, of Boeing Corporation from January 2006 through August 2008 (closing price on the first trading day of the month). The results are as follows:

-Which of the following is true about index numbers? Index numbers are
A) used to make a relative comparison of different time periods.
B) used to measure the trend component.
C) used to measure the seasonal component.
D) used to measure the cyclical component.
E) used to measure the irregular component.

Question

Consider the following to answer the question(s) below:
A third-order autoregressive model, AR (3) was fit to monthly closing stock prices, adjusted for dividends, of Boeing Corporation from January 2006 through August 2008 (closing price on the first trading day of the month). The results are as follows:

-Which of the following is true about index numbers? Index numbers are
A) used to make a relative comparison of different time periods. 
B) used to measure the trend component. 
C) used to measure the seasonal component. 
D) used to measure the cyclical component. 
E) used to measure the irregular component.

Quizplus · Accepted Answer

Index numbers are commonly used to make a relative comparison of different time periods. They allow for the comparison of values across different time periods that may have different levels or bases, making it easier to identify trends or patterns in the data. Choices B-E refer to the different components of time series analysis, which may use index numbers as a tool, but do not define what index numbers are.

Consider the Following to Answer the Question(s) Below