The sum of the weights in a weighted moving average forecast must
A)equal the number of periods being averaged.
B)equal 1.00.
C)be less than 1.00.
D)be greater than 1.00.

Question

Quizplus · Accepted Answer

In a weighted moving average forecast, the weights assigned to each period must be proportional to their relative importance in the forecast. Therefore, the sum of the weights must equal 1.00, as this ensures that the forecast is based on all periods being averaged.

The Sum of the Weights in a Weighted Moving Average