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Test BankForecasting

1. Which simple forecasting method says the forecast is equal to the mean of the historical data?a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

2. Which simple forecasting method says the forecast is equal to the last observed value?a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

3. Which simple forecasting method says the forecast is equal to the last value from the same season?a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

4. Which simple forecasting method says the forecast is equal to the last value plus the average change?a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

5. Which simple forecasting method is a consequence of the efficient market hypothesis?a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

6. Which simple forecasting method is equivalent to extrapolating a line draw between the first and lost observations?a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

7. Which simple forecasting method uses the formula y T+ h|T= y?

a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

8. Which simple forecasting method uses the formula y T+ h|T= yT?


9. Which simple forecasting method uses the formula y T+ h|T= yT +h−km?


10. Which simple forecasting method uses the formula y T+ h|T=hT−1

( yT− y1)?


11. Which simple forecasting method uses the command meanf(x)?a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

12. Which simple forecasting method uses the command naive(x)?a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

13. Which simple forecasting method uses the command snaive(x)?a. Average Methodb. Naïve Methodc. Seasonal Naïve Method

d. Drift Method

14. Which simple forecasting method uses the command rwf(x, drift=TRUE)?a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

15. Which of the following is an assumption made about forecasting residuals?e. Residuals are normally distributedf. Residuals are uncorrelatedg. Residuals have constant varianceh. None of the above

16. Which of the following is an assumption made about forecasting residuals?a. Residuals have mean zerob. Residuals are normally distributedc. Residuals have constant varianced. None of the above

17. Which of the following is useful property of forecasting residuals?a. Residuals have mean zerob. Residuals are uncorrelatedc. Residuals have constant varianced. None of the above

18. Which of the following is useful property of forecasting residuals?a. Residuals are normally distributedb. Residuals are uncorrelatedc. Residuals have mean zerod. None of the above

19. What is the consequence of forecasting residuals that are not uncorrelated?a. Prediction intervals are difficult to calculateb. Information is left in the residuals that should be usedc. Forecasts are biasedd. None of the above

20. What is the consequence of forecasting residuals that don’t have mean zero?a. Prediction intervals are difficult to calculateb. Information is left in the residuals that should be usedc. Forecasts are biasedd. None of the above

21. Which measure of forecast accuracy has the formula T−1∑t=1

T

|y t− y t|t−1|?

a. MAEb. MSEc. RMSEd. MAPE

22. Which measure of forecast accuracy has the formula T−1∑t=1

T

( y t− y t|t−1 )2


23. Which measure of forecast accuracy has the formula √T−1∑t=1

T

( y t− y t|t−1 )2?


24. Which measure of forecast accuracy has the formula 100T−1∑

t=1

T

|y t− y t|t−1||y t|

?


25. Which measure of forecast accuracy is scale independent?a. MAEb. MSEc. RMSEd. MAPE

26. The training set should make up approximately what percent of the data?a. 20%b. 50%c. 60%d. 80%

27. The test set should make up approximately what percent of the data?a. 20%b. 50%c. 60%d. 80%

28. Which of the following is the command for making a time plot?a. plot(x)b. seasonplot(x)c. monthplot(x)d. Acf(x)

29. Calculation of forecasts is based on what?a. Test setb. Training setc. Bothd. Neither

30. Forecast accuracy is based on what?a. Test setb. Training setc. Bothd. Neeither

31. Which of the following is the command for making a seasonal plot?a. plot(x)b. seasonplot(x)c. monthplot(x)d. Acf(x)

32. Which of the following is the command for making a seasonal subseries plot?a. plot(x)b. seasonplot(x)c. monthplot(x)d. Acf(x)

33. Which of the following is the command for making a ACF plot?a. plot(x)b. seasonplot(x)c. monthplot(x)d. Acf(x)

34. Which of the following allows you to see departures from the seasonal pattern?a. Time plotb. Seasonal plot

c. Seasonal subseries plotd. ACF plot

35. Which of the following allows you to see changes in seasonality over time?a. Time plotb. Seasonal plotc. Seasonal subseries plotd. ACF plot

36. A long term increase or decrease in the data is known as what?a. Trendb. Seasonalc. Cyclicald. White Noise

37. A series that is influenced by seasonal factors is known as what?a. Trendb. Seasonalc. Cyclicald. White Noise

38. Data that exhibits rises and falls that are not of a fixed period is known as what?a. Trendb. Seasonalc. Cyclicald. White Noise

39. Data that is uncorrelated over time is known as what?a. Trendb. Seasonalc. Cyclicald. White Noise

39. Which of the following is not a component of time series decomposition?a. Seasonalb. Trend-Cyclec. Autocorrelationd. Remainder

40. Which of the following time series decomposition models is appropriate when the magnitude of the seasonal fluctuations are not proportional to the level?a. Additiveb. Multiplicativec. Bothd. Neither

41. Which of the following time series decomposition models is appropriate when the magnitude of the seasonal fluctuations are proportional to the level?a. Additiveb. Multiplicativec. Bothd. Neither

42. Which of the following time series decomposition models is more prevalent with economic series?a. Additiveb. Multiplicativec. Bothd. Neither

43. What is the R command for doing classical decomposition?a. classical(x)b. decompose(x)c. stl(x)d. method(x)

44. What is the R command for doing STL decomposition?a. classical(x)b. decompose(x)c. stl(x)d. method(x)

Exhibit 1

Line A

Line B (Straight Line)

Line C (Not Straight)

45. Refer to Exhibit 1. Line A is which simple forecasting method?a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

46. Refer to Exhibit 1. Line B is which simple forecasting method?a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

47. Refer to Exhibit 1. Line C is which simple forecasting method?a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

Figure 2

Line A

Line B

Line C

48. Refer to Exhibit 2. Line A is which simple forecasting method?a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

49. Refer to Exhibit 2. Line B is which simple forecasting method?a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

50. Refer to Exhibit 2. Line C is which simple forecasting method?a. Average Methodb. Naïve Methodc. Seasonal Naïve Methodd. Drift Method

Figure 3

51. Refer to Exhibit 3. The peaks are in which quarter?a. Quarter 1b. Quarter 2c. Quarter 3d. Quarter 4

52. Refer to Exhibit 3. The trough are in which quarter?a. Quarter 1b. Quarter 2c. Quarter 3d. Quarter 4

Figure 4

53. Refer to Exhibit 4. The peaks are in which quarter?a. Quarter 1b. Quarter 2c. Quarter 3d. Quarter 4

54. Refer to Exhibit 4. The trough are in which quarter?a. Quarter 1b. Quarter 2c. Quarter 3d. Quarter 4

55. Refer to Exhibit 4. In which quarter is there a decline in the seasonal affect?a. Quarter 1b. Quarter 2c. Quarter 3d. Quarter 4

Figure 5

Year 1 Year 2Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q410 6 8 12 11 7 9 13

56. Refer to Figure 5. Using the average method, what is the forecast of Quarter 2 of Year 3? (Don’t use a calculator.)a. 7b. 9.5c. 13.85d. 13

57. Refer to Figure 5. Using the naïve method, what is the forecast of Quarter 2 of Year 3? (Don’t use a calculator.)a. 7b. 9.5c. 13.85d. 13

58. Refer to Figure 5. Using the seasonal naïve method, what is the forecast of Quarter 2 of Year 3? (Don’t use a calculator.)a. 7b. 9.5c. 13.85d. 13

59. Refer to Figure 5. Using the drift method, what is the forecast of Quarter 2 of Year 3? (Don’t use a calculator.)a. 7b. 9.5c. 13.85d. 13

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