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vlabodo [156]
2 years ago
7

Even though the moving averages help highlight the long-run trend of a time series, the moving-average model is not designed for

making forecasts in the presence of trends. Explain the reason why we should not rely on moving averages for predicting future observations of a trending series.
Business
1 answer:
kobusy [5.1K]2 years ago
4 0

Answer:

Moving averages <em>cannot be used to make future forecasts successfully because certain events like demand, supply ,quality and external factors such as competitions</em> cannot be determined with the use of Moving averages, and these factors have a huge impact on prices

Explanation:

Moving averages are generated / obtained using data from events that occurred previously hence they highlight the long-run trend of a time series, but <em>they cannot be used to make future forecasts successfully because certain events like demand, supply ,quality and external factors such as competitions</em> cannot be determined with the use of Moving averages. and these factors have a huge impact on prices

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