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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
  1. In a time series decomposition, which component captures repeating patterns tied to calendar periods shorter than one year?

    Answer: Seasonal

    Seasonal components reflect regular fluctuations that repeat within a year, such as holiday sales spikes or summer demand peaks.

  2. A market analyst runs a regression of sales (Y) on advertising spend (X) and obtains R² = 0.81. What does this mean?

    Answer: 81% of sales variation is explained by advertising spend

    R² measures the proportion of variance in the dependent variable explained by the independent variable(s) in the model.

  3. Which smoothing technique assigns exponentially decreasing weights to older observations when forecasting?

    Answer: Exponential smoothing

    Exponential smoothing applies geometrically declining weights so recent data has greater influence on the forecast.

  4. A p-value of 0.03 on a regression coefficient means:

    Answer: We reject H₀ at the 5% significance level

    A p-value below the chosen significance level (0.05) means we reject the null hypothesis that the coefficient equals zero.

  5. The Durbin-Watson statistic is primarily used to detect:

    Answer: Autocorrelation in regression residuals

    The Durbin-Watson statistic tests for first-order serial correlation in the residuals of a regression model.

  6. A forecaster uses a 3-period moving average. The last three sales values are 100, 120, and 110. What is the forecast for the next period?

    Answer: 110

    The 3-period moving average forecast is (100 + 120 + 110) / 3 = 110.

  7. In hypothesis testing, a Type II error occurs when:

    Answer: A false null hypothesis is not rejected

    A Type II error (beta error) means failing to reject H₀ when it is actually false — a missed detection.