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CFA Level 2
Quantitative Methods

Estimating Seasonal Index for Q4

Hard Time-series Analysis Seasonality

In a certain retail store, the sales data for the last three years reveals a consistent seasonal pattern. The store has observed that sales tend to peak during the holiday season (November to December) and dip during the summer months (July to August). The management is interested in using this time-series data to forecast future sales by applying a seasonal decomposition approach.

At the end of the third year, the management has compiled the following quarterly sales data (in thousands):

Year 1: Q1: 150, Q2: 120, Q3: 130, Q4: 260

Year 2: Q1: 160, Q2: 130, Q3: 140, Q4: 280

Year 3: Q1: 170, Q2: 140, Q3: 150, Q4: 300

Using the additive model for seasonal decomposition, what is the estimated seasonal index for Q4 based on the data provided?

Hint

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