Test Bank
Forecasting
1. Which simple forecasting method says the forecast is equal to the mean of the
historical data?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
2. Which simple forecasting method says the forecast is equal to the last observed
value?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
3. Which simple forecasting method says the forecast is equal to the last value from
the same season?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
4. Which simple forecasting method says the forecast is equal to the last value plus
the average change?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
5. Which simple forecasting method is a consequence of the efficient market
hypothesis?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
6. Which simple forecasting method is equivalent to extrapolating a line draw
between the first and lost observations?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
7. Which simple forecasting method uses the formula ŷT+h|T = y̅?
a.
b.
c.
d.
Average Method
Naïve Method
Seasonal Naïve Method
Drift Method
8. Which simple forecasting method uses the formula ŷT+h|T = yT ?
a.
b.
c.
d.
Average Method
Naïve Method
Seasonal Naïve Method
Drift Method
9. Which simple forecasting method uses the formula ŷT+h|T = yT+h−km ?
a.
b.
c.
d.
Average Method
Naïve Method
Seasonal Naïve Method
Drift Method
h
10. Which simple forecasting method uses the formula ŷT+h|T = T−1 (yT − y1 )?
a.
b.
c.
d.
Average Method
Naïve Method
Seasonal Naïve Method
Drift Method
11. Which simple forecasting method uses the command meanf(x)?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
12. Which simple forecasting method uses the command naive(x)?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
13. Which simple forecasting method uses the command snaive(x)?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
14. Which simple forecasting method uses the command rwf(x, drift=TRUE)?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
15. Which of the following is an assumption made about forecasting residuals?
e. Residuals are normally distributed
f. Residuals are uncorrelated
g. Residuals have constant variance
h. None of the above
16. Which of the following is an assumption made about forecasting residuals?
a. Residuals have mean zero
b. Residuals are normally distributed
c. Residuals have constant variance
d. None of the above
17. Which of the following is useful property of forecasting residuals?
a. Residuals have mean zero
b. Residuals are uncorrelated
c. Residuals have constant variance
d. None of the above
18. Which of the following is useful property of forecasting residuals?
a. Residuals are normally distributed
b. Residuals are uncorrelated
c. Residuals have mean zero
d. None of the above
19. What is the consequence of forecasting residuals that are not uncorrelated?
a. Prediction intervals are difficult to calculate
b. Information is left in the residuals that should be used
c. Forecasts are biased
d. None of the above
20. What is the consequence of forecasting residuals that don’t have mean zero?
a. Prediction intervals are difficult to calculate
b. Information is left in the residuals that should be used
c. Forecasts are biased
d. None of the above
21. Which measure of forecast accuracy has the formula T −1 ∑Tt=1|yt − ŷt|t−1 |?
a.
b.
c.
d.
MAE
MSE
RMSE
MAPE
22. Which measure of forecast accuracy has the formula T −1 ∑Tt=1(yt − ŷt|t−1 )
a.
b.
c.
d.
2
MAE
MSE
RMSE
MAPE
2
23. Which measure of forecast accuracy has the formula √T −1 ∑Tt=1(yt − ŷt|t−1 ) ?
a.
b.
c.
d.
MAE
MSE
RMSE
MAPE
24. Which measure of forecast accuracy has the formula
a.
b.
c.
d.
̂t|t−1 |
100T−1 ∑T
t=1|yt −y
|yt |
?
MAE
MSE
RMSE
MAPE
25. Which measure of forecast accuracy is scale independent?
a. MAE
b. MSE
c. RMSE
d. MAPE
26. The training set should make up approximately what percent of the data?
a. 20%
b. 50%
c. 60%
d. 80%
27. The test set should make up approximately what percent of the data?
a. 20%
b. 50%
c. 60%
d. 80%
28. Which of the following is the command for making a time plot?
a. plot(x)
b. seasonplot(x)
c. monthplot(x)
d. Acf(x)
29. Calculation of forecasts is based on what?
a. Test set
b. Training set
c. Both
d. Neither
30. Forecast accuracy is based on what?
a. Test set
b. Training set
c. Both
d. Neeither
31. Which of the following is the command for making a seasonal plot?
a. plot(x)
b. seasonplot(x)
c. monthplot(x)
d. Acf(x)
32. Which of the following is the command for making a seasonal subseries plot?
a. plot(x)
b. seasonplot(x)
c. monthplot(x)
d. Acf(x)
33. Which of the following is the command for making a ACF plot?
a. plot(x)
b. seasonplot(x)
c. monthplot(x)
d. Acf(x)
34. Which of the following allows you to see departures from the seasonal pattern?
a. Time plot
b. Seasonal plot
c. Seasonal subseries plot
d. ACF plot
35. Which of the following allows you to see changes in seasonality over time?
a.
b.
c.
d.
Time plot
Seasonal plot
Seasonal subseries plot
ACF plot
36. A long term increase or decrease in the data is known as what?
a. Trend
b. Seasonal
c. Cyclical
d. White Noise
37. A series that is influenced by seasonal factors is known as what?
a. Trend
b. Seasonal
c. Cyclical
d. White Noise
38. Data that exhibits rises and falls that are not of a fixed period is known as what?
a. Trend
b. Seasonal
c. Cyclical
d. White Noise
39. Data that is uncorrelated over time is known as what?
a. Trend
b. Seasonal
c. Cyclical
d. White Noise
39. Which of the following is not a component of time series decomposition?
a. Seasonal
b. Trend-Cycle
c. Autocorrelation
d. Remainder
40. Which of the following time series decomposition models is appropriate when
the magnitude of the seasonal fluctuations are not proportional to the level?
a. Additive
b. Multiplicative
c. Both
d. Neither
41. Which of the following time series decomposition models is appropriate when
the magnitude of the seasonal fluctuations are proportional to the level?
a. Additive
b. Multiplicative
c. Both
d. Neither
42. Which of the following time series decomposition models is more prevalent with
economic series?
a. Additive
b. Multiplicative
c. Both
d. Neither
43. What is the R command for doing classical decomposition?
a. classical(x)
b. decompose(x)
c. stl(x)
d. method(x)
44. What is the R command for doing STL decomposition?
a. classical(x)
b. decompose(x)
c. stl(x)
d. method(x)
Exhibit 1
Line A
Line B
(Straight Line)
Line C
(Not Straight)
45. Refer to Exhibit 1. Line A is which simple forecasting method?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
46. Refer to Exhibit 1. Line B is which simple forecasting method?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
47. Refer to Exhibit 1. Line C is which simple forecasting method?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
Figure 2
Line A
Line B
Line C
48. Refer to Exhibit 2. Line A is which simple forecasting method?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
49. Refer to Exhibit 2. Line B is which simple forecasting method?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
50. Refer to Exhibit 2. Line C is which simple forecasting method?
a. Average Method
b. Naïve Method
c. Seasonal Naïve Method
d. Drift Method
Figure 3
51. Refer to Exhibit 3. The peaks are in which quarter?
a. Quarter 1
b. Quarter 2
c. Quarter 3
d. Quarter 4
52. Refer to Exhibit 3. The trough are in which quarter?
a. Quarter 1
b. Quarter 2
c. Quarter 3
d. Quarter 4
Figure 4
53. Refer to Exhibit 4. The peaks are in which quarter?
a. Quarter 1
b. Quarter 2
c. Quarter 3
d. Quarter 4
54. Refer to Exhibit 4. The trough are in which quarter?
a. Quarter 1
b. Quarter 2
c. Quarter 3
d. Quarter 4
55. Refer to Exhibit 4. In which quarter is there a decline in the seasonal affect?
a. Quarter 1
b. Quarter 2
c. Quarter 3
d. Quarter 4
Figure 5
Year 1
Q1
10
Q2
6
Year 2
Q3
8
Q4
12
Q1
11
Q2
7
Q3
9
Q4
13
56. Refer to Figure 5. Using the average method, what is the forecast of Quarter 2 of
Year 3? (Don’t use a calculator.)
a. 7
b. 9.5
c. 13.85
d. 13
57. Refer to Figure 5. Using the naïve method, what is the forecast of Quarter 2 of
Year 3? (Don’t use a calculator.)
a. 7
b. 9.5
c. 13.85
d. 13
58. Refer to Figure 5. Using the seasonal naïve method, what is the forecast of
Quarter 2 of Year 3? (Don’t use a calculator.)
a. 7
b. 9.5
c. 13.85
d. 13
59. Refer to Figure 5. Using the drift method, what is the forecast of Quarter 2 of
Year 3? (Don’t use a calculator.)
a. 7
b. 9.5
c. 13.85
d. 13