Unit-III TIME SERIES

{This UNIT has: 18 Marks:1-1Mark,1-2Marks,1-5Marks,1-10Marks}

1. Define time series/what is time-series? Give an example
* A set of figures relating to a variable arranged according to time is Called time series
OR Chronological arrangement of the Statistical data is called Time series....Jly16,18,20
* Ex:-Production of a firm arranged from the year 2000 to 2008, Sales statistics of a
certain article for the year 1998 to 2005.
2. Mention the essential requirements of a time series.
* They are (a) As far as possible the time gap must be equal,
(b) It must consist of a homogenous set of values,
(c) Data must be available for a long period of time.
3. Give any two uses of Analysis of Time Series. …July-09
* Analysis of Time series helps to (i) understand the past behavior of the data
(ii) to predict the future trend.
4. What do you meant by trend? …..Jly-10
* Trend is the overall change taking place in the series of the data over a given period.
5. Mention/What are the components of time series.
* (i) Secular trend, (ii) Seasonal trend, (iii) Cyclical variations,
(iv) Irregular/ Random variations. ---Jly-14, Mar16
6. What do you mean by/explain:Secular trend/Seasonal/cyclical/Irregular variations?
*(i) Secular trend/Trend refers to the tendency of the variable to increase, decrease, or
remain steady over a given period.
*(ii) Seasonal variations refer to the variations caused annually by the seasons of the
year. Also includes the variations of any kind which are periodic in nature and
whose period is shorter than one year (t< 1year).seasonal variations of measured
by seasonal index/indices.
*(iii) Cyclical variations are fluctuations spread over a period of more than one year.
Most of the Time series relating to Economics and Business show some kind of
cyclical variations. Cyclical variation is an oscillatory variation, which occurs in four
stages, as (i)Prosperity (ii)Decline (iii) Depression/Recession and (iv) Improvement/
Recovery.
7. What is irregular variation? Give an example/Causes …Mar19
* Irregular / Erratic variations are those changes of time series, which are irregular in
nature and do not show any pattern. The causes of irregular variations are due to
accidental happenings such as wars, earthquakes, floods, famine, fire, strikes, etc.,
8. Give a difference between „cyclical‟ and „‟irregular variations in a time series …..Mar-11
Ans:-. Refer above Answer.
9. Mention the factors causing/causes seasonal variation …June19
* (i) Climatic and whether conditions (ii) Customs, habits and traditions of the people.
10. Give an example for seasonal variation. …..Mar15,17,June17
* More sales of woolen clothes in winter season or there is more sales of Ice creams
and cool drinks in summer season.
11. Which index number is used for the measurement of seasonal variation? ---Mar15
Ans: Seasonal Indices are used.
12. Give an example for upward trend in time series. ..…Jly-11
* Prices of petroleum products/Population of India.
13. What are the stages of a cyclical trend/Business cycle? …Mar15Mar17
* (1) Prosperity (2) Decline (3) Depression/Recession and (4) Improvement/recovery.
14. Which variation is unpredictable? * Irregular/ Random variations ....June19
15. What is the duration of seasonal variation? …Mar-13
* Within one year (t<1 year)

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16. Diagrammatically represent Business cycle with stages.

17. Which components of time series are applicable in case of:-

(1) Fire accident in a factory (2) Increase of woolen goods during winter
(3) Fall in the death rate due to advances in Science (4) An era of Prosperity
(5) An increase in employment during harvest season.
* (1) Random (2) Seasonal, (3) Secular, (4) Cyclical variations (5) Seasonal variation
18. Mention the methods of measurement of trend of time series.
* (i) Graphical method (ii) Method of semi-averages
(iii) Method of moving averages (iv) Method of least squares
19. What is the name given to the line, which is obtained under method of least
squares? Ans: Linear/Straight line trend/line
20. What is a Historigram?/Name the graph of time series. ..Jly16,Jun17
* The graph of time series is called Historigram.
21. Mention the conditions to be followed in the method of least squares /Principles of
Method of least squares. …Mar19
* The sum of the deviations obtained from the actual and trend values is Zero
ie. ( ̂) and
* The sum of the squares of the deviations obtained from the actual and trend values
is least. i.e., ( ̂ ) is least
22. What do you mean by moving averages?
* Moving averages are the averages obtained by finding the arithmetic means of
successive values of the time series by taking say 3/4/5 years at a time, by leaving the
first and adding the next; this is to eliminate short-term variations/fluctuations that
are present in the time series.
23. Write any merit and demerit of moving average methods. ….Mar-14
* The merit is it is simple and easy.
* Demerit, not all trend values can be obtained by this method.
24. Mention merits and demerits of least square method. …Mar11,Jly16,Mar20
* Merits: (i) It can be used for predicting future trend (ii) Trend values can be obtained
for all time points.
* Demerits: (i) Procedure of calculation is difficult/If fresh values are added or removed
the whole procedure has to be repeated
25. Equations and Normal equations for method of least squares.
* The Linear equation is y = a+bx ; Normal equations are:-
na+b∑x=∑y; a∑x+b∑x2 =∑xy; If ∑x = 0; a =∑y/n; b =∑xy/∑x2
* Quadratic/second degree equation/parabolic trend equation
is: Y =a+bx+cx2 ; Normal equations are: na+b∑x+c∑x2 = ∑y;
a∑x + b∑x2 +c∑=∑xy; ∑x2 + b∑x3 +c∑x4=∑x2y
* The Exponential/Logarithmic equation: Y=abx
Taking Logarithms on both sides: Log y = Log a + x Log b;
The Normal equations are: nLog a+∑xLogb=∑log Y;
Log a.∑x + Log b.∑x2 =∑x Log Y
Here ∑x = 0 so, and a = AL ( 
log Y x .Log Y
); b = AL(  2 )
n x
***Cms***

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