Question

Using a large value for order k in the moving averages method is effective in
a. smoothing out random fluctuations.
b. eliminating the effect of seasonal variations in the time series.
c. tracking changes in a time series more quickly.
d. providing a forecast when only the most recent time series are relevant.

Answer 1

Answer:

The correct answer is A that is smoothing out the random fluctuations.

Explanation:

The higher values of K states the greater number of the values which need to be consider for forecasting.

When consider or taking the larger or the higher value of the irregular fluctuation which could be decreased or reduced.

And as a consequence, the large value of K will be used for smoothing of the random fluctuations.

Therefore, the right answer is smoothing of the random fluctuations.