i. For a quarterly time series, the initial step, using the ratio-to-moving average method, is to remove the seasonal components from the time series using a 3-month centered moving average. ii. In the ratio-to-moving-average procedure, using the median or modified mean eliminates trend.
iii. In the final step, using the ratio-to-moving-average method on quarterly data, the total of the modified means should theoretically be equal to 400 because the average of should be 100.
A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question

Quizplus · Accepted Answer

- For a quarterly time series, the initial step in the ratio-to-moving average method involves using a 4-quarter (not 3-month) centered moving average to remove the seasonal component, making statement (i) incorrect.- Statement (ii) is incorrect because using the median or modified mean in the ratio-to-moving-average procedure does not eliminate the trend; it's a method used to adjust or smooth the seasonal factors.- Statement (iii) is correct because, in the context of quarterly data, the sum of the seasonal indices should ideally equal 400, reflecting that the average seasonal index over the four quarters should be 100, indicating no seasonal effect when averaged out.

I for a Quarterly Time Series, the Initial Step, Using