New Click here to Enroll for SIDBI MSME Expert Class by ex-GM, SBI on Nov 24

    Register

    Question

    Which of the following scenarios demonstrates an

    appropriate application of time series analysis?
    A Determining customer satisfaction scores using survey responses. Correct Answer Incorrect Answer
    B Predicting stock prices based on historical price data. Correct Answer Incorrect Answer
    C Estimating employee turnover using regression analysis. Correct Answer Incorrect Answer
    D Identifying clusters in customer demographics. Correct Answer Incorrect Answer
    E Conducting hypothesis testing for a new product launch. Correct Answer Incorrect Answer

    Solution

    Time series analysis excels in modeling data where observations are collected at regular intervals. Predicting stock prices is a classic example where past trends, seasonality, and volatility inform future price movements. Techniques like ARIMA or exponential smoothing can model these dynamics effectively. Time series forecasting aids traders and investors in making data-driven decisions. Why Other Options Are Wrong : A) Determining customer satisfaction scores : Survey responses are typically not time-dependent, making time series analysis irrelevant. C) Estimating employee turnover : This is better suited to logistic regression or predictive modeling. D) Identifying clusters : Clustering techniques like k-means focus on grouping, not time-based trends. E) Conducting hypothesis testing : This evaluates statistical significance rather than leveraging temporal data.

    Practice Next