Question 3 The following ACF plots were produced for raw data of monthly sales of two different variables, A and B. a) Explain which variable is likely to be easier to forecast. (3 marks). b) Explain how your answer to part a) would change if these were residuals of an ARIMA model instead of "raw data of monthly sales". (3 marks). Variable A: 0.15- 0.10 - 0.05- 0.00 -0.05 - -0.10 - -0.15- 10 15 20 Variable B: 1.00 - 0.75- 0.50 - 0.25 - 0.00 12 18 24 lag [1M]

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The following ACF plots were produced for raw data of monthly sales of two different variables, A and B.

  1. a)  Explain which variable is likely to be easier to forecast. 

  2. b)  Explain how your answer to part a) would change if these were residuals of an

    ARIMA model instead of “raw data of monthly sales”. 

Question 3
The following ACF plots were produced for raw data of monthly sales of two different
variables, A and B.
a) Explain which variable is likely to be easier to forecast. (3 marks).
b) Explain how your answer to part a) would change if these were residuals of an
ARIMA model instead of "raw data of monthly sales". (3 marks).
Variable A:
0.15-
0.10 -
0.05 -
0.00
-0.05 -
-0.10 -
-0.15-
10
15
20
Variable B:
1.00 -
0.75 -
0.50 -
0.25 -
0.00
12
18
24
lag [1M]
Transcribed Image Text:Question 3 The following ACF plots were produced for raw data of monthly sales of two different variables, A and B. a) Explain which variable is likely to be easier to forecast. (3 marks). b) Explain how your answer to part a) would change if these were residuals of an ARIMA model instead of "raw data of monthly sales". (3 marks). Variable A: 0.15- 0.10 - 0.05 - 0.00 -0.05 - -0.10 - -0.15- 10 15 20 Variable B: 1.00 - 0.75 - 0.50 - 0.25 - 0.00 12 18 24 lag [1M]
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