Question

For the given 5 values, 35, 70, 30, 62, 58, the 3-year moving averages are:

• A. 45, 55, 50
• B. 40, 54, 60
• C. 55, 60, 65
• D. 45, 54, 50

Hint:

Moving averages are useful for smoothing out short-term fluctuations and highlighting the underlying trend in time series data.

Answer 1

The Correct Option is D

Step 1: Understanding the Concept:
A moving average is calculated by taking the arithmetic mean of a subset of data points. For a 3-year moving average, we average consecutive groups of three values.

Step 2: Detailed Explanation:
Given values: 35, 70, 30, 62, 58.
1. First average: \( \frac{35 + 70 + 30}{3} = \frac{135}{3} = 45 \).
2. Second average: \( \frac{70 + 30 + 62}{3} = \frac{162}{3} = 54 \).
3. Third average: \( \frac{30 + 62 + 58}{3} = \frac{150}{3} = 50 \).

Step 3: Final Answer:
The 3-year moving averages are 45, 54, 50.