Concerning a seasonal index for monthly data, which statement is incorrect?
A)A multiplicative index value of 1.000 indicates no seasonal deviation from trend.
B)Additive indexes are adjusted so they always sum to 12.
C)To make forecasts, we multiply the trend by each month's seasonal index.
D)Seasonal indexes are obtained by the process called decomposition of a time series.

Question

Quizplus · Accepted Answer

Additive indexes are adjusted so that they sum to 0 over one cycle, not to 12. This ensures that the seasonal effects average out to zero across a full cycle, maintaining the integrity of the trend component in the data.

Concerning a Seasonal Index for Monthly Data, Which Statement Is