When the underlying mean of a time series is very stable and there are no trend, cyclical, or seasonal influences:
A. a simple moving-average forecast with n = 20 should outperform a simple moving-average forecast with n = 3.
B. a simple moving-average forecast with n = 3 should outperform a simple moving-average forecast with n = 15.
C. a simple moving-average forecast with n = 20 should perform about the same as a simple moving-average forecast with n = 3.
D. an exponential smoothing forecast with a = 0.30 should outperform a simple moving-average forecast with α = 0.01.
Answer:A
When the underlying mean of a time series is very stable and there are no trend, cyclical, or seasonal influences:
A. a simple moving-average forecast with n = 20 should outperform a simple moving-average forecast with n = 3. B. a simple moving-average forecast with n = 3 should outperform a simple moving-average forecast with n = 15. C. a simple moving-average forecast with n = 20 should perform about the same as a simple moving-average forecast with n = 3. D. an exponential smoothing forecast with a = 0.30 should outperform a simple moving-average forecast with α = 0.01.