Question
Download Solution PDFIn the method of moving average, the second average is the mean of the:
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDF- In the context of time series analysis or data smoothing, the method of moving averages involves calculating a sequence of averages by taking the mean of consecutive subsets of data.
- In this method, the second average specifically refers to the mean of a specified number of terms, starting from the second term and extending to the (m + 1)th term, where 'm' represents the window size or a number of terms used for the moving average.
- Given a time series or sequence of data values X1, X2, X3, X4, X5, X6, X7, ..., the method of moving average involves computing a series of averages to obtain smoothed values.
- The second average is determined by calculating the mean of a specific subset of terms, namely the terms from X2 to the (m + 1)th term, where 'm' represents the chosen window size or the number of terms for the moving average.
- For instance, if the window size is set to 3, the second average is computed as the mean of the terms X2, X3, and X4. If the window size is 5, the second average corresponds to the mean of the terms X2, X3, X4, X5, and X6, and so on.
- The method of moving average is commonly employed for data smoothing purposes, enabling the identification of trends and patterns within a time series by reducing the impact of short-term fluctuations.
Hence, in the method of moving average, the second average is the mean of the m terms from second to (m + 1)th term.
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