Question

Suppose that we use least-squares to fit a seasonal-means trend to this time series. Figure 3 displays the original time series plot along wtih the fitted values. Time Series and Seasonal-Means Fit 10 15 Time Figure 3 Which of the following characteristics is the model able to capture? Trend Seasonality ● Trend and seasonality Seasonality and heteroskedasticity

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Answer #1

Correct option : Trend and Seasonality

Reason : We can see that the graph is going up and overall there is an increase over the time which represents an upward trend.

Now, Seasonality refers to patterns that repeat with a fixed period of time. We can see a definite pattern in the above plot where the values increase and decrease within a fixed interval of time.

So, we can say that the model is able to capture Trend and Seasonality.

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