Statistical Methods & Forecasting Flashcards
7 cards from real CMA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Statistical Methods & Forecasting flashcards as text
Which of the following is the best measure of forecast accuracy that penalizes large errors more heavily?
Answer: Mean Squared Error (MSE)
MSE squares the errors before averaging, giving disproportionately higher weight to large forecast deviations.
In multiple regression, the Variance Inflation Factor (VIF) is used to diagnose:
Answer: Multicollinearity
A VIF above 10 (or 5, depending on convention) suggests problematic multicollinearity between predictor variables.
A market analyst applies the Box-Jenkins methodology. The correct sequence of steps is:
Answer: Identify → Estimate → Diagnose → Forecast
The Box-Jenkins ARIMA process follows: model identification, parameter estimation, diagnostic checking, then forecasting.
If the autocorrelation function (ACF) of a time series cuts off sharply after lag q while the PACF decays gradually, the series likely follows:
Answer: MA(q)
An MA(q) process has an ACF that cuts off after q lags and a PACF that tails off gradually.
A confidence interval for a forecast that widens as the forecast horizon extends indicates:
Answer: Increasing uncertainty further into the future
Forecast uncertainty compounds over time, so prediction intervals naturally widen at longer horizons.
A seasonal index of 1.25 for Q4 in a multiplicative decomposition model means:
Answer: Q4 sales are 25% above the annual average trend
In a multiplicative model, a seasonal index above 1.0 means that quarter's values are proportionally above the baseline trend.
Which test is used to determine whether two population variances are equal?
Answer: F-test
The F-test compares the ratio of two sample variances to test equality of population variances.