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TIME SERIES ANALYSIS

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 PRACTICE BOOK» NOT FOR SALE
Contents

1 TIME SERIES ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

1.1 TIME SERIES ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
 1. TIME SERIES ANALYSIS

NARAYAN CHANGDER
1.1 TIME SERIES ANALYSIS
1. The seasonal index for Wednesday is 0.84. A. Trend
This tells us that, on average, the number B. Seasonality
of meals served on a Wednesday is
C. Cyclical
D. Randomness

4. The sum of Seasonal Indices based on

monthly data over a year should be
A. 16% less than daily average A. Calculated from the value of the sea-
B. 84% less than the daily average son divided by the seasonal average
C. the same as the daily average B. Dependent on the actual sales
D. 16% than the daily average C. The same as the quarterly average
E. 84% more than the daily average D. 12 (or 12.001 or 11.999 depending on
rounding errors)
2. Which term most closely relates to asso-
ciative forecasting techniques? 5. The appropriate exponential smoothing
A. Consumer surveys model for the data in the image is
B. Expert opinions
C. Predictor variables
D. Time series data
3. A restaurant has been experiencing higher
sales during the weekends as compared to A. Single exponential smoothing
the weekdays. Daily restaurant sales pat-
terns for this restaurant over a week are B. Holt’s exponential smoothing
an example of the component of time C. Holt-Winter’s exponential smoothing
series yang additive

1. A 2. C 3. B 4. D 5. C
1.1 TIME SERIES ANALYSIS 3

D. Holt-Winter’s exponential smoothing B. 21

yang multiplicative C. 28

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6. Determine the period for the time series D. 19
plot
9. In Year 1, a company’s sales were
$920KIn Year 2, a company’s sales in-
creased to $1241KIn Year 3, a company’s
sales were $1085KIn Year 4, a company’s
sales were 10% higherUse your calculator
to identify the correct trend line
A. periods of 3 quarters A. y=943.75+66.45x
B. periods of 4 years B. y=943750+66450x
C. periods of 4 quarters C. Y=943.HKX+T.45

D. periods of 5 quarters D. y=943750x+66450

10. The sales of a new popular ice-cream
7. Which of the following could be a possible
flavour in a beach resort. Choose the true
line of best fit for the data?
statement.
A. positive secular trend
B. seasonal pattern
C. cyclic pattern
D. random pattern
11. The basic difference between time series
analysis and regression analysis is
A. Time series analysis mengasumsikan
A. y =-5/2x + 20 time-variant variance
B. y =-x + 19 B. Time series analysis is a nonlinear
model
C. y = x + 20
C. Time series analysis overcomes the
D. y = 2/3x + 15
problem of serial correlation in data by ac-
8. How many seconds for the elevator to commodating the dynamics of the time se-
reach the 50th floor? ries into the model
D. Time series analysis does not focus on
data dependencies
12. Determine the period for the time series
plot below

A. 24

6. C 7. A 8. A 9. B 10. B 11. C 12. B

1.1 TIME SERIES ANALYSIS 4

A. periods of 6 days A. Trend

B. periods of 7 days B. Seasonal
C. periods of 5 days C. Cyclic
D. periods of 8 days D. Trend and Cyclic
E. Trend and Seasonal
13. The secular trend is measured by the
method of semi-averages when: 17. The component of a time series mea-

NARAYAN CHANGDER
A. Time series based on yearly values sures the fluctuations in a time series
due to economic conditions of prosperity
B. Trend is linear
and recession with a duration of approxi-
C. Time series consists of even number mately 2 years or longer
of values
A. Trend
D. None of them
B. Seasonal
14. model is suitable for time series with C. Cyclical
constant magnitude.
D. Randomness
A. Additive
18. Data concerning events over a period of
B. Multiplicative
time is called a:
15. This time series plot is an example of: A. Moving Average
B. Time Series
C. Frequency Distribution
D. Random Sample

19. If the number of time series data is 15,

what kind of moving average method is
suitable?
A. 3 points moving average
A. Cyclical variation B. 4 points moving average
B. Decreasing trend C. centred moving average
C. Seasonality D. 5 points moving average
D. Structural change
20. Which of the following is true for the coef-
16. The time series data pattern in the pic- ficient of correlation?
ture shows that the time series contains A. The coefficient of correlation is not de-
components pendent on the change of scale
B. The coefficient of correlation is not de-
pendent on the change of origin
C. The coefficient of correlation is not de-
pendent on both the change of scale and
change of origin
D. None of the above

13. B 14. A 15. D 16. E 17. C 18. B 19. A 20. C 21. B

1.1 TIME SERIES ANALYSIS 5

21. Which component of time series is at- C. Fixed budgets.

tached to the long-term variation? D. Rolling budgets.

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A. Seasonal variation
26. How many points would be obtained from
B. Secular Trend the smoothed trend line
C. Cyclic variation A. 7
D. Irregular fluctuation B. 6
22. In Q1 the SI was 0.8; in Q2 the SI was C. 5
1.2;in Q3 the SI was 0.3; So in Q4 the SI D. 4
was
27. Which variable is used to explain or pre-
A. 0.7
dict the value of the other variable?
B. 2.3
A. Explanatory
C. 2.7
B. Response
D. 1.7
C. Extraneous
23. The seasonal index for Saturday is closest D. Controlled
to
28. A pattern of variation of a time series that
repeats every year is called
A. Trend
B. Secular Variation
A. 1.22 C. Seasonal variation
B. 1.31 D. Cyclical variation
C. 1.38 29. Using four-mean smoothing with center-
D. 1.45 ing, the smoothed profit for May is closest
E. 1.49 to

24. Determine the appropriate components of

time series for the situation below:The in-
crease in sales of fireworks during New
A. $2502
Year.
B. $3294
A. Trend
C. $3503
B. Seasonal Variations
D. $3804
C. Cyclical Variations
E. $4651
D. Irregular fluctuations
30. What is Time Series?
25. Which of the following budgetary proce-
dures would be most applicable to this A. A set of data over a period of time
company’s situation? B. A set of data over a year
A. Zero based budgets. C. A set of data related with money only
B. Flexible budgets D. none of above

22. D 23. D 24. B 25. D 26. D 27. A 28. C 29. B 30. A 31. A
1.1 TIME SERIES ANALYSIS 6

31. The trend of the amount of rainfall per 35. A least-squares regression trend line was
week over a year in Western Queensland fitted to the data in the table.Which of the
is probably following statements is NOT correct?
A. Cyclic A. The trend line is a poor match for the
data.
B. Seasonal
B. The gradient will be positive.
C. Irregular
C. There is a relatively steady increase
D. There is no trend

NARAYAN CHANGDER
over time.
32. How confident should you be in interpolat- D. The value of the gradient is less than
ing data from the previous question? 10.
A. Highly confident 36. Which is moving average’s objective?
B. Moderately confident A. forecasting
C. Not confident B. smoothing
D. As it is cyc;lic, it is a given that interpo- C. estimate trend and cycle
lating is accurate at over 85% confidence
D. all the above options
33. In May the store sold $213956 worth of
37. What is NOT a univariate time series
sporting equipment. The deseasonalised
model is
value for these sales was closest to
A. ARIMA
B. Exponential Smoothing
C. WAS
A. $165 857 D. Autoregression
B. $190 420 38. Which of the following is not one of the
C. $209 677 four types of variation that is estimated
in time-series analysis?
D. $ 218 322
A. Predictable
E. $240 400
B. Trend
34. The time series plot has C. Cyclical
D. Seasonality

39. This time series plot is an example of:

A. no trend
B. seasonality only
C. an increasing trend with seasonality
D. an increasing trend only A. Seasonality

32. B 33. E 34. D 35. A 36. D 37. C 38. A 39. A

1.1 TIME SERIES ANALYSIS 7

B. Cyclical variation 45. A time series changes at an exact constant

C. A decreasing trend percentage then

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D. Structural Change A. A linear line fitted to the data gives a
perfect fit
40. A sudden increase in sales of ready made
uniforms of school children at the time of B. A linear fit to the logarithms data gives
re-opening of schools is due to which com- a perfect fit
ponent of time series?
C. A nonlinear is required to fit
A. positive secular trend
B. seasonal pattern D. A well-fitted trend line cannot be ob-
tained
C. cyclic pattern
D. random pattern 46. Which of the following is the cyclic behav-
41. A good forecast is ior of time series?
A. High bias, low variance A. Level
B. Low bias, high variance B. Trend
C. Low bias, low variance
C. Seasonality
D. High bias, high variance
D. Noise
42. The following seasonal indices were ob-
tained from a time series.The value of the
47. How many model for time series predic-
spring seasonal index is
tion?
A. 1.18
A. 1
B. 0.94
C. 1.08 B. 2
D. 1.06 C. 3
43. which is the most suitable length of mov- D. 4
ing average for smoothing in quarterly
data (frequency) 48. Choose the correct option
A. 7
B. 3
C. 4
D. 12
44. Which of the following statements could
NOT feasibly describe this situation?
A. Statement 1 A. A
B. Statement 2.
B. B
C. Statement 3.
D. Statement 4. C. C
E. Statement 5. D. D

40. B 41. C 42. C 43. C 44. C 44. D 45. A 46. C 47. B 48. D
1.1 TIME SERIES ANALYSIS 8

49. Predicting the number of days to finish 53. The seasonal index for the sales of cold
when you read 40 pages is an example of: drinks in a shop in January is 1.6. To cor-
rect the January sales of cold drinks for
seasonality, the actual sales should be
A. reduced by 37.5%
B. reduced by 40%
C. reduced by 62.5%

NARAYAN CHANGDER
D. increased by 60%
E. increased by 62.5%

54. This time series plot is an example of:

A. Interpolation
B. Extrapolation
C. An outlier
D. none of above

50. A seasonally adjusted value for the au-

tumn of 2018, when the original value
was 520, is closest to A. An increasing trend
A. 565 B. Seasonal variation
B. 478 C. A decreasing trend
C. 481 D. A structural change
D. 562 55. The actual figure can be found by

51. What is NOT a source of uncertainty in A. Dividing the deseasonalised figure by

forecasting is the seasonal index

A. Kerandoman variable target B. Dividing the seasonal index by the de-

seasonalised figure
B. Unknown parameter
C. Multiplying the deseasonalised figure
C. Model specifications by the seasonal index
D. Known predictor variable data D. Dividing the data value by the seasonal
average
52. The PACF is necessary for distinguishing
between 56. The following data represent the number
of tomatoes canned in a day by Mary
A. An AR and an MA model
Farmer.The data are smoothed using a
B. An AR and an ARMA model 5-point moving average. The first two
C. An MA and an ARMA model points in the smoothed trend line are

D. Different models from within the A. 310 and 300

ARMA family B. 310 and 288

49. B 50. A 51. D 52. B 53. A 54. C 55. C 56. B

1.1 TIME SERIES ANALYSIS 9

C. 325 and 310 61. This time series movie plot is an example
of a:
D. 335 and 310

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A. Cinematic Masterpiece
57. This time series plot is an example of: B. Cinematic Masterpiece
C. Cinematic Masterpiece
D. Cinematic Masterpiece

A. Cyclical variation
B. Irregular change
C. Seasonality
D. Multiple trends

58. The number of daily births in a particular

country hospital over a period of 10 days.
62. Semi average method is used for measure-
A. negative secular trend ment of trend when
B. seasonal pattern A. Trend is irregular
C. cyclic pattern B. Trend is linear
D. random pattern C. Trend is smooth
D. Trend is curvilinear
59. In Q1 the SI was 0.5; in Q2 the SI was
0.8;in Q3 the SI was 1.3; So in Q4 the SI 63. Which of the following is not a component
was 1.4;What can be said about the data: of time series?
A. It is cyclic A. Cyclical variation
B. There is no trend B. Variance

C. There is a positive trend C. Trend

D. Seasonal variation
D. There is a negative trend
64. The value, after a 4-point moving average
60. Moving average method is used to deter- smoothing after centering, plotted against
mine the year 2016 is
A. Seasonal variation A. 11.5
B. Trend B. 10.952
C. Cyclical variation C. 10.875
D. Irregular variation D. 10.25

57. B 58. D 59. C 60. B 61. A 61. B 61. C 61. D 62. B 63. B 64. C
1.1 TIME SERIES ANALYSIS 10

65. This time series plot is an example of: 68. Which of the following is a false statement
about seasonal indices?
A. The sum of all indices equals number
of seasons.
B. A high index means a high season.
C. Used for seasonal variations only.
D. Can be negative or positive.

NARAYAN CHANGDER
69. Which of the following statements is true
about the correlational analysis between
A. Seasonality two sets of data?
B. An increasing trend A. The correlational analysis between
C. Irregular variation two sets of data is known as a simple cor-
relation
D. Cyclical variation
B. The correlational analysis between
66. Which components listed is most applica- two sets of data is known as multiple cor-
ble to time series plot below? relation
C. The correlational analysis between
two sets of data is known as partial cor-
relation
D. None of the above

70. Each Plot shows 100observations. Which

is the most suitable correlation coeffi-
A. negative secular trend cient?
B. positive secular trend
C. cyclic pattern
D. seasonal pattern

67. Choose the correct option

A. -0.3
B. 0.9
C. 0.3
D. -0.9
A. A
B. B 71. The equation y =-2x + 7 models the
amount of gas remaining in a lawnmower
C. C after x hours of use since it was filled.
D. D What is the meaning of the slope?

65. D 66. B 67. B 68. D 69. A 70. B 71. A

1.1 TIME SERIES ANALYSIS 11

A. For each hour of mowing, the mower 75. Choose the correct option
is predicted to use 2 litres.

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B. The predicted amount of gas the lawn-
mower can hold is 2 litres
C. For every two hours of mowing, the
mower is predicted to use 7 litres. A. A
D. The predicted amount of gas remain- B. B
ing after 1 hour is 2 litres.
C. C
72. This time series plot is an example of: D. D

76. Which one of the following statement BEST

describes the time series plot for the pe-
riod shown?

A. It shows no trend and no change in

A. An increasing trend
variability
B. Multiple trends B. It shows increasing linear trend with
C. A decreasing trend constant variability
D. A hipster trend C. It shows increasing trend with de-
creasing variability
73. The following figure shows the progres- D. It shows increasing linear trend with
sive maths test scores achieved by a Year increasing variability
10 student over a 10-month period. What
type of series is this? 77. A white noise process will have

A. Cyclic A. A zero mean

B. A constant variance
B. Seasonal
C. Autocovariances that are zero except
C. Irregular at lag zero
D. No Trend D. All of the above

74. Increase in the number of patients in the 78. Deseasonalised Data can be found by:
hospital due to heat stroke is: A. Dividing actual sales by the seasonal
A. Secular trend index

B. Irregular variation B. Dividing the seasonal index by the ac-

tual sales
C. Seasonal variation
C. multiplying seasonal index by the ac-
D. Cyclical variation tual sales

72. B 73. C 74. C 75. C 76. D 77. D 78. A 79. B

1.1 TIME SERIES ANALYSIS 12

D. multiplying the seasonal index by the 81. Which of the following is most likely to ap-
deseasonalisted data ply to the time series plot below?
79. To deseasonalise data, the relevant
seasonal index.
A. Multiply by
B. Divide by
C. Add

NARAYAN CHANGDER
D. Subtract
A. a positive secular trend
80. model is suitable for time series with
increasing or decreasing magnitude. B. a seasonal variation
A. Additive C. a cyclic pattern
B. Multiplicative D. a random variation

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