Question

Moving averages are useful in identifying

• A. Seasonal component
• B. Irregular component
• C. Trend component
• D. Cyclical component

Hint:

Think of a moving average as "blurring" a noisy picture. The blur removes the sharp, random "pixels" (fluctuations) so you can see the main shape (the trend) more clearly.

Answer 1

The Correct Option is C

The moving average method is a time series analysis technique used to smooth out short-term fluctuations and highlight longer-term trends. By averaging the data points over a specific period, the method reduces the impact of random, irregular variations and seasonal effects. This makes the underlying trend component of the series much easier to see.