وَأَحْصَىٰ كُلَّ شَيْءٍ عَدَدًا
"And He has enumerated everything in numbers." (Allah perfectly counts and knows the exact measure of all creations).
Q1. A sequence of observations recorded over time is
known as a:
A. Geographical data
B. Time series data ✓ Correct Answer
C. Arithmetic series
D. Geometric series
Explanation: A time series is a set of observations recorded in
chronological order over successive time periods.
Q2. The hourly temperature recorded at a weather
bureau is an example of:
A. Chronological data
B. Time series
C. a and b ✓ Correct Answer
D. Geographical data
Explanation: Hourly readings taken over time are both chronologically
ordered and constitute a time series, so both (a) and (b) apply.
Q3. A time series is a function of:
A. Groups
B. Frequency
C. Time ✓ Correct Answer
D. None
Explanation: A time series expresses a variable as a function of time.
Q4. The Systematic component of variation in time
series is called:
A. Signal ✓ Correct Answer
B. Noise
C. Erratic
D. Random
Explanation: Systematic, predictable components of a time series
(trend, seasonal, cyclical) are collectively called the signal.
Q5. The irregular component of variation in time
series is called:
A. Signal
B. Noise
C. Random
D. b and c ✓ Correct Answer
Explanation: The irregular component is unpredictable, so it is
referred to as both noise and random variation.
Q6. Basic components of time series are (is):
A. One
B. Three
C. Four ✓ Correct Answer
D. Five
Explanation: A time series has four basic components: secular trend,
seasonal variation, cyclical fluctuation, and irregular variation.
Q7. A time series is not necessarily composed of all
four components:
A. Correct ✓ Correct Answer
B. False
C. Unexplained
D. None
Explanation: It is correct that not every time series contains all
four components; some may lack a cyclical or seasonal element.
Q8. A time series assumes to follow the model:
A. Y = T+S+C+I
B. Y = T×S×C×I
C. Y = T+S-C-I
D. (a) and (b) ✓ Correct Answer
Explanation: A time series can be modeled either additively
(Y=T+S+C+I) or multiplicatively (Y=T×S×C×I), so both are valid.
Q9. The study of time series is mainly required for:
A. Estimation
B. Prediction
C. Grouping
D. (a) and (b) ✓ Correct Answer
Explanation: Time series analysis is primarily used for estimating
past trends and predicting future values.
Q10. In the multiplicative model, it's assumed that
the value 'Y' of a series is equal to:
A. Sum of four components
B. Product of
components ✓ Correct Answer
C. Division of components
D. None
Explanation: In the multiplicative model, Y = T×S×C×I, i.e. the
product of all four components.
Q11. In the additive model, it's assumed that the
value Y of a series is the:
A. Sum of four
components ✓ Correct Answer
B. Division of components
C. Product of components
D. None
Explanation: In the additive model, Y = T+S+C+I, i.e. the sum of all
four components.
Q12. Which is not a signal?
A. Seasonal variations
B. Accidental movements ✓ Correct Answer
C. Secular trend
D. Cyclical movements
Explanation: Accidental (irregular) movements are unpredictable noise,
not part of the systematic signal.
Q13. Which is a signal?
A. Seasonal variations
B. Cyclical movements
C. Secular trend
D. All ✓ Correct Answer
Explanation: Secular trend, seasonal variations, and cyclical
movements are all systematic components, so all count as signal.
Q14. Which is a noise?
A. Seasonal variations
B. Cyclical movements
C. Secular trend
D. Irregular movements ✓ Correct Answer
Explanation: Irregular movements are unpredictable and are therefore
classified as noise, unlike the systematic components.
Q15. Which of the following is an example of
irregular variation?
A. The production of wheat from
1980-1997
B. Birth by hours of day
C. The sales of room heater
during winter
D. Sudden causes by war ✓ Correct Answer
Explanation: Sudden causes like war are unpredictable, one-off events,
making them irregular (erratic) variations.
Q16. A line or curve that shows the general tendency
of a time series is:
A. Secular trend ✓ Correct Answer
B. Seasonal variations
C. Cyclical fluctuations
D. Irregular movements
Explanation: The secular trend is the smooth line or curve
representing the long-term general direction of a time series.
Q17. Secular trend is:
A. Erratic variations
B. Noise
C. Signal ✓ Correct Answer
D. Accidental movements
Explanation: Secular trend is a systematic, predictable component of a
time series, making it part of the signal.
Q18. The decline in death rate due to advancement in
science is an example of:
A. Secular trend ✓ Correct Answer
B. Seasonal variations
C. Cyclical fluctuations
D. All
Explanation: A gradual long-term change like declining death rate due
to scientific advancement is a secular trend.
Q19. Movement in secular trend is:
A. Smooth
B. Steady
C. Regular
D. All ✓ Correct Answer
Explanation: Secular trend movements are smooth, steady, and regular
in direction over the long run.
Q20. Relatively smooth, steady and gradual movements
of a time series in the same direction is called:
A. Seasonal variations
B. Secular trend ✓ Correct Answer
C. Cyclical fluctuations
D. Irregular movements
Explanation: This description precisely defines the secular trend
component of a time series.
Q21. A need for increased wheat production due to a
constant increase in population is an example of:
A. Irregular movements
B. Seasonal variations
C. Cyclical fluctuations
D. Secular trend ✓ Correct Answer
Explanation: A steady, long-term increase driven by population growth
is a secular trend.
Q22. The long term oscillations about the trend are
called:
A. Cyclical
fluctuations ✓ Correct Answer
B. Seasonal variations
C. Secular trend
D. None
Explanation: Cyclical fluctuations are the long-term, wave-like
oscillations of a time series around its trend line.
Q23. Cyclical Fluctuations are:
A. Erratic variations
B. Noise
C. Signal ✓ Correct Answer
D. Accidental movements
Explanation: Cyclical fluctuations are a systematic, recurring
component of a time series, so they are part of the signal.
Q24. They don't have fixed periodicity:
A. Seasonal variations
B. Cyclical variation ✓ Correct Answer
C. Secular trend
D. None
Explanation: Unlike seasonal variations, cyclical variations do not
repeat over a fixed, exact period.
Q25. The lowest point relative to the rest of the
particular cycle is:
A. Trough ✓ Correct Answer
B. Peak
C. Crest
D. Base
Explanation: The lowest point of a business cycle is called the trough,
opposite to the peak (highest point).
Q26. Cyclical fluctuation reflects the effect caused
by:
A. Seasons
B. Accidental movements
C. Business cycle ✓ Correct Answer
D. Secular movements
Explanation: Cyclical fluctuations arise mainly due to phases of the
business cycle: boom, recession, depression, and recovery.
Q27. Cyclical fluctuations are less predictable than:
A. Seasonal variations
B. Secular trend
C. Irregular variation
D. a and b ✓ Correct Answer
Explanation: Cyclical fluctuations lack fixed periodicity, making them
less predictable than both seasonal variations and secular trend.
Q28. The seasonal variations are:
A. Short term movements
B. Long term movements
C. Recurring
D. a & c ✓ Correct Answer
Explanation: Seasonal variations are short-term, regularly recurring
movements within a time series.
Q29. Seasonal variations are:
A. Erratic variations
B. Noise
C. Signal ✓ Correct Answer
D. Accidental movements
Explanation: Seasonal variations are a predictable, systematic
component of a time series, making them part of the signal.
Q30. Short term movements that represent the
regularly recurring changes in a time series are called:
A. Secular trend
B. Seasonal variations ✓ Correct Answer
C. Cyclical fluctuations
D. Irregular movements
Explanation: Seasonal variations are defined as short-term, regularly
recurring changes in a time series.
Q31. The weekly statements of sales in a store is an
example of:
A. Secular trend
B. Irregular movements
C. Cyclical fluctuations
D. Seasonal variations ✓ Correct Answer
Explanation: Recurring weekly sales patterns reflect regular,
short-term recurring changes, i.e. seasonal variations.
Q32. An increase in consumption of electricity in
summer is an example of:
A. Seasonal variations ✓ Correct Answer
B. Secular trend
C. Cyclical fluctuations
D. Irregular movements
Explanation: This is a regularly recurring seasonal change tied to the
time of year, i.e. a seasonal variation.
Q33. An after Eid sale in a departmental store is an
example of:
A. Secular trend
B. Seasonal variations ✓ Correct Answer
C. Cyclical fluctuations
D. Irregular movements
Explanation: Sales tied to a recurring calendar event like Eid
represent a seasonal variation.
Q34. The period of seasonal variations is:
A. One year or less ✓ Correct Answer
B. Several years
C. 2-10 years
D. Unpredictable
Explanation: Seasonal variations repeat within a period of one year or
less (e.g. monthly, quarterly).
Q35. Shortage of certain consumer's goods before
annual budget is an example of:
A. Seasonal variations ✓ Correct Answer
B. Secular trend
C. Cyclical fluctuations
D. Irregular movements
Explanation: This shortage recurs every year before the budget, making
it a seasonal variation.
Q36. The main causes of seasonal variations are:
A. Seasons
B. Religious festivals
C. Social customs
D. All ✓ Correct Answer
Explanation: Seasonal variations arise from a mix of causes: weather
seasons, religious festivals, and social customs.
Q37. Seasonal variations reflect the effect caused by
events which are:
A. Non-recurring events
B. Recurring events ✓ Correct Answer
C. Unpredictable
D. None
Explanation: By definition, seasonal variations result from events
that recur regularly, such as seasons or festivals.
Q38. Irregular movements are:
A. Erratic variations
B. Noise
C. Accidental movements
D. All ✓ Correct Answer
Explanation: Irregular movements are known interchangeably as erratic
variations, noise, and accidental movements.
Q39. A steel strike, delaying production for a week,
is an example of:
A. Secular trend
B. Seasonal variations
C. Cyclical fluctuations
D. Irregular movements ✓ Correct Answer
Explanation: A strike is a sudden, one-off, unpredictable event,
making it an irregular movement.
Q40. A fire in a factory delaying production for 3
weeks is an example of:
A. Irregular movements ✓ Correct Answer
B. Secular trend
C. Cyclical fluctuations
D. Seasonal variations
Explanation: A factory fire is an unforeseen, non-recurring event,
classifying it as an irregular movement.
Q41. The irregular movements are also known as:
A. Erratic variations
B. Accidental variations
C. Random variations
D. All ✓ Correct Answer
Explanation: Irregular movements have several equivalent names:
erratic, accidental, and random variations.
Q42. Decline in stock market due to a nuclear test is
an example of:
A. Irregular movements ✓ Correct Answer
B. Seasonal variations
C. Cyclical fluctuations
D. Secular trend
Explanation: A nuclear test is a sudden, unpredictable shock event,
making the market decline an irregular movement.
Q43. Irregular movements are:
A. Signal
B. Noise ✓ Correct Answer
C. Systematic component
D. None
Explanation: Since irregular movements are unpredictable and
non-systematic, they are classified as noise.
Q44. Which have a more dangerous effect on a
business?
A. Seasonal variations
B. Cyclical variation ✓ Correct Answer
C. Secular trend
D. None
Explanation: Cyclical variations, tied to boom/recession phases of the
business cycle, tend to have a more severe impact on business than seasonal
patterns.
Q45. It is affected by personal bias greatly:
A. Free hand curve
method ✓ Correct Answer
B. Moving averages method
C. Method of semi averages
D. Method of least squares
Explanation: The free hand curve method relies on the analyst's
judgment to draw the trend line, making it highly subject to personal bias.
Q46. This method is subject to personal bias:
A. Method of semi averages
B. Moving averages method
C. Free hand curve
method ✓ Correct Answer
D. Method of least squares
Explanation: The free hand curve method depends on subjective
judgment, making it prone to personal bias.
Q47. Method of semi averages can only be applied if
the trend is:
A. Non-linear
B. Linear ✓ Correct Answer
C. Curve-linear
D. All
Explanation: The method of semi-averages assumes a straight-line
(linear) trend.
Q48. In the measurement of secular trend, the moving
averages:
A. Give the trend in a straight
line
B. Measure the seasonal
variations
C. Smooth out the time
series ✓ Correct Answer
D. None of these
Explanation: Moving averages work by smoothing out short-term
fluctuations to reveal the underlying trend of the time series.
Q49. The method that doesn't give the trend values at
the beginning and at the end is:
A. Free hand curve method
B. Moving averages
method ✓ Correct Answer
C. Method of semi averages
D. Method of least squares
Explanation: The moving averages method loses trend values at both
ends of the series since a full period average isn't available there.
Q50. Some trend values are lost when using:
A. Free hand curve method
B. Moving averages
method ✓ Correct Answer
C. Method of semi averages
D. Method of least squares
Explanation: The moving averages method sacrifices trend values at the
start and end of the series.
Q51. The most appropriate method for the estimation
of secular trend is:
A. Free hand curve method
B. Moving averages method
C. Method of semi averages
D. Method of least
squares ✓ Correct Answer
Explanation: The method of least squares gives the best-fitting,
mathematically precise trend line, making it the most appropriate method.
Q52. Σx = Σx³ = Σx⁵ = 0 if origin is:
A. At the beginning of the time
period
B. At the middle of the time
period ✓ Correct Answer
C. At the end of the time period
D. Anywhere
Explanation: Placing the origin at the middle of the time period makes
the coded time values symmetric around zero, so odd-power sums vanish.
Q53. For even number of time periods, the coded
variable would assume values:
A. ..., -5, -3, -1, 0, 1, 3, 5,
...
B. ..., -3, -2, -1, 0, 1, 2, 3,
...
C. ..., -1.5, -0.5, 0.5, 1.5, ...
D. a and c ✓ Correct Answer
Explanation: For an even number of periods, the coded time variable
takes odd integer values (..., -3,-1,1,3,...) or, equivalently, half-integer
values (..., -1.5,-0.5,0.5,1.5,...).
Q54. For odd number of time periods, the coded
variable would assume values:
A. ..., -5, -3, -1, 0, 1, 3, 5,
...
B. ..., -3, -2, -1, 0, 1, 2,
3, ... ✓ Correct Answer
C. ..., -1.5, -0.5, 0.5, 1.5, ...
D. None
Explanation: For an odd number of periods, the coded time variable
takes consecutive integer values centered at zero (..., -2,-1,0,1,2,...).
Q55. The process of elimination of unwanted
fluctuations in a time series is called:
A. Smoothing time
series ✓ Correct Answer
B. Including bias
C. Grouping
D. None
Explanation: Removing unwanted, irregular fluctuations to reveal the
underlying pattern is called smoothing the time series.
Q56. The equation of the quadratic trend is:
A. ŷ = a + bx + cx² ✓ Correct Answer
B. ŷ = a + bx
C. ŷ = abˣ
D. ŷ = bx
Explanation: A quadratic trend includes a squared term, giving the
equation ŷ = a + bx + cx².
Q57. Which is better when the change in the amount of
change is constant per unit time?
A. ŷ = a + bx
B. ŷ = a + bx + cx² ✓ Correct Answer
C. ŷ = abˣ
D. ŷ = bx
Explanation: A constant second difference (change in the amount of
change) is best captured by the quadratic trend equation ŷ = a + bx + cx².
Q58. To shift the origin of a linear trend we have to
change:
A. Intercept only ✓ Correct Answer
B. Slope only
C. Data
D. Regression coefficient
Explanation: Shifting the origin of a linear trend only shifts the
intercept (a); the slope (b) remains unchanged.
Q59. We substitute for x in ŷ = a + bx if we shift
the origin k units forward:
A. x ÷ k
B. x - k
C. x × k
D. x + k ✓ Correct Answer
Explanation: Shifting the origin forward by k units means replacing x
with (x + k) in the trend equation.
Q60. We substitute for x in ŷ = a + bx if we shift
the origin k units backward:
A. x + k
B. x - k ✓ Correct Answer
C. x × k
D. None
Explanation: Shifting the origin backward by k units means replacing x
with (x - k) in the trend equation.
Q61. If we shift the origin k units forward then:
A. Intercept increased by k
times of slope ✓ Correct Answer
B. Intercept decreased by k times
of slope
C. Slope increased k times
D. Slope decreased k times
Explanation: Shifting the origin forward increases the intercept by k
times the slope (new a = a + bk), while the slope stays the same.
Q62. If we shift the origin k units backward then:
A. Intercept increased by k times
of slope
B. Intercept decreased by k
times of slope ✓ Correct Answer
C. Slope increased k times
D. Slope decreased k times
Explanation: Shifting the origin backward decreases the intercept by k
times the slope (new a = a - bk), while the slope stays the same.
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