Time Series Analysis MBA 1st Year Semester Very Short Question Answer Notes Study Material Notes Unit Wise Syllabus Chapter Wise Notes Time Series Analysis, Concept, Additive And multiplicative models, Components of time series, Trends Analysis, Least squares Method Linear and non linear equations, applications In Business Decision-Making. Index Number Meaning, Types of Index Numbers, Uses Of Index Numbers, Construction Of Price, quantity And Volume Indices Fixed Base and Chain Base Methods.
Very Short Question Answers
Q.1 what is time series? Give its various components.
Ans. A time series is a historical series of statistical data. Since statistical data are historical, they are subject to the influences of all the changes that may occur over any period of time. The usual classification of the influences affecting statistical data recording over time is one based upon the nature of the influence.
Q.2. Give any two merits and demerits of free-hand method?
Ans. Merits: These are as follows:
- Free-hand method of estimating trend is the simplest method. Time and labour is saved, for reason they are widely used in business.
- It is more flexible than rigid mathematical function, hence fits the curve more closely to the data.
Demerits: These are as follows:
- The main demerit of this method is that it is highly subjective. The results will depend very much on the judgement of the drawer of the line, hence subject to personal bias, mistakes, etc.
- Free-hand method of curve fitting is subjective. It has little value as a bias of projection future.
Q.3. Give the application of time series in business decision-making.
Ans. Application of time series are:
- Study of the past behavior of the data.
- Comparison with other series.
- Study of present fluctuations.
- Estimation of trade cycles.
Q.4. what do you mean by trend analysis?
Ans. The term trend analysis refers to the concept of collecting information and attempting to spot a pattern, or trend in the information. It uses a technique called least squares to fit a trend line to set of time series data and then project the line into the future for a forecast.
Q.5. What do you understand by index numbers?
Ans. Index number is a ratio or an average of ratios expressed as a percentage. It is a statistics which assigns a single number to several individual statistics in order to quantify trends.
Q.6. What are the charactferistics of index numbers?
Ans. The characteristics of index numbers are:
- These are expressed in percentage.
- These are relative measures.
- Index numbers are specialized averages.
- Index numbers measure charges which are not directly measurable.
Q.7. what are the advantages of index numbers?
Ans. The advantages of index numbers are:
- To get information about the changes in the internal price level.
- Increase or decrease in foreign trade.
- Knowledge about the changes in the cost of living in the country.
- Information about production trend in the country.
Q.8. What are the objectives of consumer price Index?
Ans. The Objectives of consumer price index are:
- To measure the impact of price change in the purchasing power.
- To track inflation.
- To control inflation with the help of monetary policy to take decisions.
Q.9. What are the advantages of chain base index number?
Ans. Chain base index number has the following advantages:
- To introduce new items and omit old items.
- Free from seasonal variations.
- Presents a general picture of movements over a period of time.
Q.10. What are the disadvantages of chain base index number?
Ans. The disadvantages of chain base index number are:
- Long range comparisons of chained percentage are computed from link relatives.
- It does not present any specific picture of the movements over a period of time.