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Which of the following is correct regarding the analysis of four components of time series analysis?

  1. A
    The additive model is used when all the four components of the time series analysis are independent of each other.
  2. B
    The multiplication model is used when all the four components of the time series analysis are independent of each other.
  3. C
    The multiplication model is used when all the four components of the time series analysis are dependent of each other.
  4. D
    None

Solution & Step-by-step Explanation

In Time Series analysis, there are two primary models to represent the components (Trend , Seasonal , Cyclical , and Irregular ):Additive Model: . This model is used when the four components are assumed to be independent of each other.Multiplicative Model: . This model is used when the components are considered dependent on each other.Based on the options, Option A correctly describes the condition for the additive model.

Practice this question

Try it yourself before checking the explanation above.

Which of the following is correct regarding the analysis of four components of time series analysis?
A
The additive model is used when all the four components of the time series analysis are independent of each other.
B
The multiplication model is used when all the four components of the time series analysis are independent of each other.
C
The multiplication model is used when all the four components of the time series analysis are dependent of each other.
D
None

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StatisticsTime Series Analysis

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