Asked by Austin Walters on Jun 19, 2024
Verified
Suppose that we calculate the four-period moving average of the following time series 
The centered moving average for period 3 is:
A) 22.5
B) 21.25
C) 20.50
D) 18.5
Centered Moving Average
A method used in time series analysis to smooth data points by creating averages of different subsets of the full data set.
Four-Period Moving Average
A method to smooth out data by calculating the average of each set of four consecutive periods.
Time Series
A sequence of data points or observations taken at successive, evenly spaced points in time, used for analyzing trends, cycles, and forecasts.
- Conduct a moving average analysis to smooth time series data and identify patterns.
Verified Answer
JB
Jovana BjelanovicJun 20, 2024
Final Answer :
B
Explanation :
To calculate the centered moving average for period 3, we need to take the average of the values in periods 2, 3, and 4 of the four-period moving average.
The four-period moving average is:
(10+12+16+20)/4 = 14.5
(12+16+20+25)/4 = 18.25
(16+20+25+30)/4 = 22.75
(20+25+30+35)/4 = 27.5
So the centered moving average for period 3 is:
(14.5+18.25+22.75)/3 = 21.17
Rounded to two decimal places, the answer is 21.25, which is choice B.
The four-period moving average is:
(10+12+16+20)/4 = 14.5
(12+16+20+25)/4 = 18.25
(16+20+25+30)/4 = 22.75
(20+25+30+35)/4 = 27.5
So the centered moving average for period 3 is:
(14.5+18.25+22.75)/3 = 21.17
Rounded to two decimal places, the answer is 21.25, which is choice B.
Learning Objectives
- Conduct a moving average analysis to smooth time series data and identify patterns.