CMA Statistical Methods & Forecasting 2

Question 1

In a time series decomposition, which component captures repeating patterns tied to calendar periods shorter than one year?

Accepted Answer

Seasonal

Answer

Seasonal components reflect regular fluctuations that repeat within a year, such as holiday sales spikes or summer demand peaks.

Question 2

A market analyst runs a regression of sales (Y) on advertising spend (X) and obtains R² = 0.81. What does this mean?

Accepted Answer

81% of sales variation is explained by advertising spend

Answer

R² measures the proportion of variance in the dependent variable explained by the independent variable(s) in the model.

Question 3

Which smoothing technique assigns exponentially decreasing weights to older observations when forecasting?

Accepted Answer

Exponential smoothing

Answer

Exponential smoothing applies geometrically declining weights so recent data has greater influence on the forecast.

Question 4

A p-value of 0.03 on a regression coefficient means:

Accepted Answer

We reject H₀ at the 5% significance level

Answer

A p-value below the chosen significance level (0.05) means we reject the null hypothesis that the coefficient equals zero.

Question 5

The Durbin-Watson statistic is primarily used to detect:

Accepted Answer

Autocorrelation in regression residuals

Answer

The Durbin-Watson statistic tests for first-order serial correlation in the residuals of a regression model.

(CMA) Certified Market Analyst Practice Test