Question

Moving average method is used for measurement of trend when:

• A. Trend is linear
• B. Trend is non linear
• C. Trend is curvilinear
• D. None of them

Answer 1

The correct option is A Trend is linear

$\Rightarrow$ Moving average method is used for measurement of trend when : $Trendislinear$.

$\Rightarrow$ In the method of moving average, successive arithmetic averages are computed from overlapping groups of successive values of a time series. Each group includes all the observations in a given time interval,termed as the period of moving average.

$\Rightarrow$ The next group is obtained by replacing the oldest value by thenext value in the series. The averages of such groups are known as the moving averages. The moving averages of a group are always shown at the center of its period.