CBE Forecasting 2

Question 1

Which forecasting method assigns exponentially decreasing weights to older observations?

Accepted Answer

Exponential smoothing

Answer

Simple moving average

Answer

Naïve forecast

Answer

Linear interpolation

Question 2

In a regression-based forecast, a high R-squared value primarily indicates that:

Accepted Answer

The independent variables explain a large share of variance in the dependent variable

Answer

The model has no multicollinearity

Answer

Forecasts will be accurate out-of-sample

Answer

Residuals are normally distributed

Question 3

A firm uses a 5-period moving average. The most recent five sales figures (oldest to newest) are 100, 110, 105, 115, 120. What is the forecast for the next period?

Accepted Answer

112

Answer

110

Answer

115

Answer

108

Question 4

Which error metric penalizes large forecast errors more heavily due to squaring?

Accepted Answer

Mean Squared Error (MSE)

Answer

Mean Absolute Error (MAE)

Answer

Mean Absolute Percentage Error (MAPE)

Answer

Theil's U statistic

Question 5

Seasonal indices in a time-series decomposition are used to:

Accepted Answer

Adjust data for recurring within-year patterns

Answer

Remove trend from the data

Answer

Measure cyclical fluctuations

Answer

Estimate long-run economic growth

Question 6

The Delphi method is best described as:

Accepted Answer

An iterative structured expert opinion process

Answer

A statistical model using leading indicators

Answer

A Box-Jenkins ARIMA identification procedure

Answer

A neural network ensemble approach

Question 7

Which component of a time series reflects irregular, unpredictable short-term fluctuations?

Accepted Answer

Irregular (random)

Answer

Trend

Answer

Cyclical

Answer

Seasonal