Questions Bank-Theory Qs Papers

INTRODUCTION

1) Distinguish between secular trend, seasonal variations and cyclic fluctuations. (Give graphical
illustrations)
2) Name the characteristic movement of time series with which you will mainly associate-
(i) an increase in employment for sales during the summer months,
(ii) a fire in a factory that delays the factory’s production for 2 weeks,
(iii) a continually increasing demand for smaller automobiles,
(iv) a fall in death rate due to scientific advancement, and
(v) an era of prosperity,
(vi) issue of library books during examinations.
Give reasons for your answers.
3) Discuss the different decompositions in a time series, stating clearly the assumptions made in each.
4) Name the characteristic movement of time series with which you will mainly associate-
(i) an increase in employment for sales during the summer months,
(ii) Bomb blast in Delhi
(iii) a fall in death rate due to scientific advancement,
(iv) an era of prosperity,
(v) increase in sale of cold drinks during summer.
Give reasons for your answers.
5) Distinguish between
Method of Curve fitting and Moving Averages
Ratio to MA and Ratio to Trend
6) Describe the different components of a time series. Give suitable examples for each.
7) Why is the multiplicative model the most commonly used assumption, as compared to additive
model in time series analysis? Justify your answer with assumptions and relative merits.
8) What is a time series? Indicate the objectives of its analysis. Explain its
importance with respect to economics and business studies.
9) Describe the different components of a time series. Give suitable examples for each
10) What is a time series? Indicate the objectives of its analysis. Explain its importance with respect to
economics and business studies.
11) Discuss the different decompositions in a time series, stating clearly the assumptions made in each.

TREND

12) Discuss method of partial sums for fitting modified exponential curve to a given set of data?
13) Give the genesis of the Logistic curve:

k
Ut = b0
1 + ea +bt
and explain method of three selected points for fitting this curve to the data regarding production in
various years.
14) How do you select the type of trend?
15)
16) It is desired to determine a trend curve in a time series by a moving average method covering a
consecutive set of seven points which would accurately represent the series if it consists of a cubic
polynomial in a time variable. Verify that the weights for the trend values are symmetrical about the
mid-value and their sum is unity.
17) Obtain the trend values for a time series of extent m=2k+1 if it consists of a quadratic polynomial in
a time variable.
18) Enumerate the various properties of the curve
 𝑘
𝑈𝑡 = 1+𝑒 𝑎+𝑏𝑡 ; b<0.
Trace the curve and describe its different phases with respect to a time series data
of production.

19) Trace the curve and describe its different phases with respect to a time series data regarding
production in various years. Show that the output of an industry follows logistic trend.
20) Give the genesis of the curve
𝛽
𝑈𝑡 = 1+𝛿𝑒 −𝜀𝑡 ; 0
Hence, derive the curve. Describe any one method for fitting this curve.
21) It is desired to determine a trend curve in a time series by a moving average method covering a
consecutive set of eleven points which would accurately represent the series if it consists of a
quadratic polynomial in time variable. Obtain the formula
1
[11, 2] = 429 [ -36, 9, 44, 69, 84, 89, 84, 69, 44, 9, -36].
Further, show that the formula is, in fact, good enough, for a cubic polynomial.
22) Name the different types of mathematical curves used in fitting trends to economic time series giving
the mathematical reason for deciding the type of trend to be fitted to given time series data. Explain
method of three selected points for fitting any one of the growth curves.
23) Discuss the method of moving average for measurement of trend. Obtain the trend values for a time
series of extent m=2k+1 if it consists of a quadratic polynomial in a time variable.
24) “Output of many industries follows logistic trend.” Justify the statement. Trace the curve and
describe its different phases with respect to a time series data regarding production in various years.
25) Suppose it is desired to determine a trend curve in a time series by a moving average of consecutive
sets of seven points which would accurately represent the series if it consists of a quadratic formula
1
[7,2] = [−4, 6, 12, 14, 12, 6, −4]
42
Show that this formula is good enough for a cubic polynomial.
26) Explain clearly what is meant by trend of a time series. Obtain a suitable weighted moving average
formula covering consecutive sets of seven points which would accurately represent the series if it
consists of a quadratic polynomial in time variable.
27) It is desired to determine a trend curve in a time series by a moving average method covering a
consecutive set of nine points which would accurately represent the series if it consists of a cubic
polynomial in time variable. Obtain the formula
1
[9, 3] = 231 [-21, 14, 39, 54, 59, 54, 39, 14, -21].
Further, show that the formula is, in fact, good enough, for a quadratic polynomial.
28) Discuss the effect of detrending a time series data on the periodic component and the random
component.

SEASONAL COMPONENT

29) What do you understand by the term seasonal fluctuations in the time series data? Explain the basic
difference and assumptions with its merit/demerits under which ratio to trend and ratio to moving
average method is applied for measuring seasonal indices.
30) Explain what is meant by seasonal fluctuations of a time-series. How do they differ from cyclic
fluctuations in a time-series? Describe the Link Relative method for measuring the seasonal
variations.
31) Describe the method of ‘Ratio- to- moving averages’ for measuring the seasonal variations, stating
clearly the assumptions made.
32) Explain what is meant by seasonal fluctuations of a time series. How do they differ from cyclic
fluctuations in a time series? Describe the method of Link Relatives for measuring the seasonal
variations, stating clearly the assumptions made.
33) Explain Link Relative method for computing seasonal indices, clearly outlining the assumptions
made.
34) Describe the appropriate method for obtaining the seasonal component from a given time series of
monthly data when the data is known to have prominent business cycles.
35) Explain what is meant by seasonal fluctuations of a time series. How do they differ from cyclic
fluctuations in a time series? Describe the method of Link Relatives for measuring the seasonal
variations, stating clearly the assumptions made.

CYCLIC COMPONENT

36) Explain the term cyclical component of a time series Describe a method for obtaining this
component from a given series.
37) Let a time series Xt observed at unit time intervals contain a deterministic sinusoidal component at a
known frequency  together with a random error term Zt .
𝑋𝑡 =  + 𝑐𝑜𝑠𝑡 + 𝑠𝑖𝑛𝑡 + 𝑍𝑡
where Zt denotes a purely random process. Estimate the unknown parameters µ,,  .
38) Explain the Harmonic Analysis method for determining the cyclic component of a time series.
39) Explain the nature of cyclical component. How do seasonal variations differ from them?
RANDOM COMPONENT

40) How ‘Variate difference method’ is used for finding the degree of the trend polynomial to be fitted.
41) Describe the method for estimating the variance of the random component of time series; bringing out
clearly the assumptions under which it is applicable
42) Describe a method for estimating the variance of the random component in a time series, stating
clearly the assumptions under which it is applicable.
43) Why residue method is not an appropriate method to measure random component in time series data?
Describe variate difference method and discuss how it is used to measure random component.
44) Suppose that a time series can be represented as the sum of its functional part and
random component as
𝑈𝑡 = 𝑎0 + 𝑎1 𝑡 + ⋯ + 𝑎𝑘−1 𝑡 𝑘−1 + 𝜀𝑡 ; t= 1, 2…, n
where 𝑡 NID(0,V). Show that the estimate of V depends on k.
45) Describe a method for estimating the variance of the random component in a time series, stating
clearly the assumptions under which it is applicable.
46) Explain a suitable method for estimating the variance of the random component?