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T F 1. A time series is a collection of data recorded over a period of time, usually monthly, quarterly, or yearly.
T F 2. Long-term forecasts are usually from one year to more than 10 years into the future.
T F 3. One component of a time series is the secular trend that is the smooth movement of a series over a short period of time, such as a few months or quarters.
T F 4. Episodic and residual variations can be projected into the future.
T F 5. In a time series analysis, the letter ''a'' in the linear trend equation, is the value of Y' when t = 0.
T F 6. In the linear trend equation, t is any value that corresponds with a time period, i.e., month or quarter.
T F 7. If the sales, production or other data over a period of time tend to approximate a straight-line trend, the equation developed by the least squares method cannot be used to forecast sales for a future period.
T F 8. The trend component of a time series is obtained my minimizing the sum of the squares of the errors.
MULTIPLE CHOICES
9- Economic periods of prosperity followed by recession are described as:
A. Secular trend
B. Seasonal variation
C. Cyclical variation
D. Erratic variation
10- What is variation within a year, such as high sales at Christmas and Easter and low sales in January, called?
A. Secular trend
B. Seasonal variation
C. Cyclical variation
D. Variation
11- The following linear trend equation was developed for annual sales from 1995 to 2001 with 1995 the base or zero year. Y’ = 500 + 60t (in $thousands). What are the estimated sales for 2005 (in $ thousands)?
A. $ 500
B. $ 560
C. $1,040
D. $1,100
12- The following linear trend equation was developed for the annual sales of the Jordan Manufacturing Company. Y’ = 500 + 60t (in $ thousands).
How much are sales increasing by?
A. $ 60,000 per year
B. $ 6,000 per month
13- lf the least squares equation for sales data going from 1996 to 2001 is Y' = 10 + 1.3t (in $ millions), what is the value of t and the forecast for 2002?
A. t = 6, y = 17.8
B. t = 0, y = 10.0
C. t = 7, y = 19.1
D. t = 10, y = 0.0
14- If the exports (in $ millions) for the period 1997 through 2001 were $878, $892, $864, $870 and $912 respectively, what are these values called?
A. Moving average
B. Linear trend equation
C. Logarithmic trend equation
D. Time series
15- What is the long-term behavior of a variable over an extended period of time called?
A. Secular trend
B. Seasonal variation
C. Cyclical variation
D. Irregular or erratic variation
16- Why are long range predictions considered essential to managing a firm?
A. To develop plans for possible new plants
B. To have raw materials available for future demand
C. To develop plans for future financing
D. To have enough staffer future needs
E. All of the above
17- In the linear trend equation, how is the average change in the dependent variable represented for every unit change in time?
A. a
B. b
C. l
D. Y'
18- For a time series beginning with 1988 and extending up to 2001, which year would be coded with a one when using the coded method?
A. 1986
B. 1988
C. 1989
D. 1998
19- For an annual time series extending from 1993 through 2001, how many years would be lost in a three year moving average?
A. 2 at the start and 1 at the end
B. 1 at the start and 1 at the end
C. 2 at the start and 0 at the end
D. 0 at the start and 2 at the end
20- Given a linear time series trend, Y' = 5.2 + 3.1t, what is the forecast for 2002 if the time series started in 1995?
A. 23.8
B. 26.9
C. 30.0
D. 21.7
