18 Questions
What is the primary difference between the additive and multiplicative decomposition procedures in time series analysis?
The use of differences versus ratios
Which time series component is calculated by subtracting the estimated trend, cycle, and seasonality from the original data series?
Irregular component
What is the purpose of using a centered moving average in time series analysis?
To estimate the trend component
What is the primary advantage of using a time series decomposition plot?
It provides a visual representation of the time series components
What is the definition of stationarity in the context of time series analysis?
A time series with constant mean and variance over time
Which of the following is NOT a component of a time series in the classical decomposition method?
Residual component
What is the primary purpose of pseudo-additive decomposition in time series analysis?
To handle series with one exceptional month or quarter
Which of the following components is related to the economic health and confidence of the nation?
Trend-cycle component
What is the purpose of a decomposition plot in time series analysis?
To visualize the decomposition procedure
What is the name of the method used to obtain the estimates of the cyclical, seasonal, and irregular components in Figure 1?
STL method
Which of the following is a characteristic of a time series that exhibits stationarity?
Constant mean and variance over time
What is the term for the remaining component after the trend and seasonal components have been removed from a time series?
Irregular component
What is the primary reason for using a multiplicative decomposition in this time series analysis?
To account for the increasing seasonal variation as the level of the series increases
What is the purpose of calculating the ratio of the data to the centered 12-month MA values?
To decompose the time series into its trend-cycle, seasonal, and irregular components
Why are six values missing at the beginning and six values missing at the end of the centered 12-month MA calculation?
Due to the averaging procedure used in the calculation
What is the advantage of using a centered 12-month MA over a simple MA?
It provides a more robust estimate of the trend-cycle component
What is the mathematical representation of the ratio of the actual data to the moving average values?
Rt = St / Tt
What is the primary component of the time series that is isolated through the calculation of the ratio of the data to the centered 12-month MA values?
Seasonal component
Explore the process of determining seasonal indices for housing sales data and constructing the seasonal component. Learn how to compute the irregular series by subtracting estimated seasonality, trend, and cycle from the original data series. Dive into de-trended housing sales data analysis with detailed steps and figures.
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