Question
In a time-series forecasting problem, if the
seasonal indices for quarters 1, 2, and 3 are 0.80, 0.90, and 0.95 respectively. What can you say about the seasonal index of quarter 4?Solution
The seasonal indices must sum to 4, since there are 4 quarters. .80 + .90 + .95 = 2.65, so the seasonal index for the 4 th quarter must be 1.35 so B is the correct answer.
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