Chapter 14 Time Series Analysis

Question 1

Define time series

Answer 1

A set of numeric data of a random variable that is gathered over time at regular intervals and arranged in chronological order.

Question 2

Purpose of time series analysis

Answer 2

To identify recurring patterns in a time series, quantify these patterns through building a statistical model and then using the statistical model to forecast future values.

Question 3

The 4 components of a time series

Answer 3

Trend

Cycles

Seasonality

Irregular influences

Question 4

Decomposition of a time series

Answer 4

Isolating the components of a time series and quantifying them statistically

Question 5

Define trend

Answer 5

Long term smooth underlying movement in a time series

Question 6

Define Cycles

Answer 6

Medium to long term deviations from the trend. Reflecting expansion and contraction of economic activity

Question 7

Define seasonal variations

Answer 7

Fluctuations in a time series that are repeated at regular intervals within a year

Question 8

Irregular fluctuations

Answer 8

Fluctuations in a time series from unpredictable events.

Question 9

Define Seasonal ratio

Answer 9

An index that measures the % deviation of each actual y from its moving average value.