CMA Statistical Methods & Forecasting 5

Question 1

A market analyst wants to forecast next quarter's demand using the Holt-Winters method. This method specifically accounts for:

Accepted Answer

Both trend and seasonality

Answer

Holt-Winters triple exponential smoothing captures level, trend, and seasonal components simultaneously.

Question 2

The Augmented Dickey-Fuller (ADF) test is used to test for:

Accepted Answer

The presence of a unit root in a time series

Answer

The ADF test evaluates whether a time series has a unit root, which would indicate non-stationarity.

Question 3

In logistic regression applied to market segmentation, the output of the model represents:

Accepted Answer

The probability of belonging to a category

Answer

Logistic regression models the probability that an observation belongs to a given class using the logistic (sigmoid) function.

Question 4

A scatter plot of two market variables shows a curved (non-linear) relationship. The best immediate remedy in regression analysis is to:

Accepted Answer

Transform one or both variables (e.g., logarithm)

Answer

Variable transformations such as logarithms, square roots, or polynomials can linearize non-linear relationships for regression.

Question 5

When performing cross-validation on a forecasting model, the primary goal is to:

Accepted Answer

Estimate out-of-sample predictive performance

Answer

Cross-validation assesses how well a model generalizes to unseen data by testing it on held-out folds not used in training.

(CMA) Certified Market Analyst Practice Test