INDEX NUMBERS

TYPES OF INDEX
1 PRICE INDEX
2 QUANTITY INDEX
3 VALUE INDEX

APPROACHES OF CONSTRUCTING INDEX

1 AGGREGATES METHOD
2 AVERAGE OF RELATIVES METHOD

1 AGGREGATES METHOD

UNWEIGHTED AGGREGATES METHOD

a
ΣP1/ ΣP0 x 100

b WEIGHTED AGGREGATES METHODS = VARIOUS METHODS EXIST TO ASSIGN WEIGHT, SOM

↓
A LASPEYRES METHOD
B PAASCHE METHOD
C FIXED WEIGHT AGGREGATES METHOD
D FISHER'S IDEAL PRICE METHOD
E MARSHALL-EDGEWORTH METHOD

LASPEYRES PRICE INDEX = (Σ LASPEYRES QUANTITY INDEX =

P1 x Q0)/(Σ P0 x Q0 ) x 100 (Σ Q1 x P0)/(Σ Q0 x P0 ) x 100

PAASCHE PRICE INDEX = (Σ P1 PAASCHE QUANTITY INDEX=

x Q1)/(Σ P0 x Q1 ) x 100 (Σ Q1 x P1)/(Σ Q0 x P1 ) x 100

FISHER'S IDEAL PRICE INDEX= [(ΣP1 x

Q0)/(Σ P0 x Q0 ) x (Σ P1 x Q1)/(Σ P0 x Q1 )]^ (1/2) x 100

NOTE : THE FISHER'S ABOVE METHOD IS THE GEOMETRIC MEAN OF LASPEYRES AND PAASCHE PR

FISHER'S IDEAL QUANTITY INDEX= [(ΣQ1

P0)/(Σ Q0 x P0 ) x (ΣQ1 x P1)/(Σ Q0 x P1 )]^ (1/2) x 100

NOTE : THE FISHER'S ABOVE METHOD IS THE GEOMETRIC MEAN OF LASPEYRES AND PAASCHE Q

MARSHALL-EDGEWORTH INDEX = [{Σ(Q0+Q1) x P1} / {Σ(Q0+Q1) x P0} ] x 100

 MARSHALL-EDGEWORTH INDEX = [{Σ(Q0+Q1) x P1} / {Σ(Q0+Q1) x P0} ] x 100

VALUE INDEX NUMBERS = (Σ P1 x Q1)/(Σ P0 x Q0 ) x 100

2 AVERAGE OF RELATIVES METHOD

a UNWEIGHTED AVERAGE OF RELATIVES METHOD = Σ (P1/P0 x 100) / N

b WEIGHTED AVERAGE OF RELATIVES METHOD = (Σ P1 x Q0)/(Σ P0 x Q0 ) x 100

NOTE : WEIGHTED AVERAGE OF RELATIVES METHOD AND LASPEYRES PRICE INDEX M

CHAIN INDEX NUMBERS = (AVERAGE LINK RELATIVE OF THE GIVEN YEAR x CHAIN INDEX OF THE
PREVIOUS YEAR) / 100

↓
WHERE, AVERAGE LINK RELATIVE OF THE GIVEN YEAR = (PRICE IN A GIVEN PERIOD / THE PREVIOUS
YEAR'S PRICE) x 100

TEST FOR CONSISTENCY

↓ ↓
TIME REVERSAL FACTOR
TEST REVERSAL TEST

TIME REVERSAL TEST → I(0,1) = 1/ I(1,0)

FACTOR REVERSAL TEST = (Σ P1 x Q1)/(Σ P0 x Q0 ) x VALUE RATIO

 CIRCULAR TEST → I(0,1) x I(1,2) x I(2,0) = 1

P0 P1 Q0 Q1 P1Q0 P0Q0 Q1P0 P1Q1

KILO 15 30 500 700 15000 7500 10500 21000
DOZEN 8 14 100 70 1400 800 560 980
LITER 6 17 200 120 3400 1200 720 2040
KILO 10 16 50 70 800 500 700 1120
SUM 39 77 850 960 20600 10000 12480 25140

LASPEYRES PRICE INDEX 206

LASPEYRES PRICE INDEX 124.8
PAASCHE PRICE INDEX 201.44
UNWEIGHTED AVG OF RELATIVE PRICE 204.58
NG INDEX
THOD
S METHOD

THOD

ST TO ASSIGN WEIGHT, SOME ARE GIVEN BELOW

TITY INDEX =
x P0)/(Σ Q0 x P0 ) x 100

TY INDEX=
x P1)/(Σ Q0 x P1 ) x 100

[(ΣP1 x
x 100

SPEYRES AND PAASCHE PRICE INDEX METHOD

[(ΣQ1 x
100

ASPEYRES AND PAASCHE QTY INDEX METHOD

Q1) x P0} ] x 100

Q1) x P0} ] x 100

x 100

S METHOD

/P0 x 100) / N

Σ P0 x Q0 ) x 100

LASPEYRES PRICE INDEX METHOD ARE SAME

EAR x CHAIN INDEX OF THE

VEN PERIOD / THE PREVIOUS

↓
CIRCULAR TEST
P1/PO x
100
200
175
283.33
160
818.33
 Correlation coffiecient= Σ{X - (Mean of X)} x
{Y - (Mean of Y)}/ [Σ{X - (Mean of X)}^2 x {Y - b = n ΣXY - (ΣX) (ΣY)/ n Σ(X)^2 - (ΣX)^2
(Mean of Y)}^2] ^ 1/2

Beta = ΣXY - n(Mean of X)(Mean of Y)/(ΣX^2-

a = Mean of Y - b(mean of X)
n(Mean of X)^2)

Variance = Σ [X - (Mean of X)]^2 / Variance = Σ [X - (Mean of X)]^2

n-1 in / n-1 in
case of sample case of population

Covariance of X and Y = Σ X - (Mean of X) x Covariance of X and Y = Σ X - (Mean of X) x

Y - (Mean of Y)/n-1 Y - (Mean of Y)/n
in case of sample in case of population

1 2 3 4 5 6
X - Mean Y - Mean
X Y 1^2 2^2 1x2 3x4
of X of Y
0.29 -0.1 0.25 -0.1 0.06 0.01 -0.03 0
0.31 0.24 0.27 0.24 0.07 0.06 0.06 0
0.1 0.11 0.06 0.11 0 0.01 0.01 0
0.06 -0.08 0.02 -0.08 0 0.01 0 0
-0.07 0.03 -0.11 0.03 0.01 0 0 0

Sum 0.69 0.2 0.49 0.2 0.15 0.09 0.04 0

Mean of X 0.14 0.04

Correlation
0.59
coffiecient

Coefficient of
0.35
determination
 X Y XY x^2 Y^2 Ỹ= a+bX Y-Ỹ (Y - Ỹ)^2
1 1 1 1 1 1.18 -0.18 0.03
3 2 6 9 4 2.45 -0.45 0.21
4 4 16 16 16 3.09 0.91 0.83
6 4 24 36 16 4.36 -0.36 0.13
8 5 40 64 25 5.64 -0.64 0.4
9 7 63 81 49 6.27 0.73 0.53
11 8 88 121 64 7.55 0.45 0.21
14 9 126 196 81 9.45 -0.45 0.21
SUM 56 40 364 524 256 40 0 2.55
7 3136 5
Slope Of
Regression
10.73

b 0.64 53.45
a 0.55 56
0.95

Mean of X 7
Mean of Y 5

Standard error 0.65

2 3 4 5
a - mean 2^2* b-mean of 4^2*
a b probablity COV(a,b)
of a proportion b proportion
7 13 0.5 -2 2 4 8 -4
11 5 0.5 2 2 -4 8 -4
sum 18 18 1 0 4 0 16 -8
see
mean of a 9
formulae
see
mean of b 9
formulae

Standard Standard
deviation deviation see
2 4
of stock of stock formulae
A B

Risk of see
0.5
Portfolio formulae

Q.221 2.5

Q222 1
 Q224
Variable X1 Variable X1
mean 25 mean 50
Standard Standard
3 4
deviation deviation

solution If the standard deviation and mean is given and you have been aske

SD
P(Z≥ mean (X2 - X1))/SD(X2-X1)
X2 AND X1 ARE VARIABL

x-xbar
0.36 25 20.6 4.4 6.97
0.4 20 20.6 -0.6 0.14
0.24 15 20.6 -5.6 7.53
14.64
y-ybar 7.32 2.71
0.5 26 20.6 5.4 14.58
0.3 18 20.6 -2.6 2.03
0.2 11 20.6 -9.6 18.43
35.04
17.52 4.19
 Standard Error =
ΣY)/ n Σ(X)^2 - (ΣX)^2
((Σ(Y - Ỹ)^2) / n-2)^0.5

Regression line = Ỹ = a+bX

Unsystematic risk = Variance of

the return on the stock -
Systematic risk

d Y = Σ X - (Mean of X) x
Systematic risk = R^2 x
variance of the market return
of population

Standard deviation of portfolio OR Portfolio Risk

= ( Va x Wa^2 + Σ Vb x Wb^2 + 2 Wa x Wb x COV
(a,b))^.5

W= V= please
Q227
weight variance refer
a = stock
b = stock

R^2 or Coefficient of determination =

aΣY+bΣXY - n(Mean of Y)^2 / ΣY^2 -
n(Mean of Y)^2
OR
= RSS/TSS
en and you have been asked to find out the variable, so the below formulae is to be used

STANDARD
DEVIATION
X2 AND X1 ARE VARIABLES
 ANOVA
If the differences among more than two sample means are signific

Assumptions made in ANOVA

1) Various populations from which the samples are drawn should be normal and have the same variance
2) ANOVA is based on a comparison of two estimates of the population variance. One estimate is obtain
the sample means and the second estimate is obtained from variation that exists within the samples.

Steps in ANOVA

1) Determine an estimate of the population variance from the variance that exists among the sample me
2) Determine an estimate of the population variance from the variance that exists within the samples.
3) Accept the null hypothesis if the above two estimates are equal or else reject the null hypothesis.

If the estimates are equal to or approximately nearer, we get the ratio of the two estimates as either exac

GIVEN serial no. sample 1(x1) sample 2(x2) sample 3(x3)

1) Calculation of the variance among the sample means

nj xj' xj" xj'-xj" (xj'-xj")^2

population variance = Σ[nj(xj'-xj")^2]/[k-1]

where k = no. of rows/items/samples

nj = no. of values under one sample
xj' = mean of values of one sample
xj" = mean of x'

2) Calculation of the variance wihin the samples

sample 1 sample 2
x1 x1-x1' (x1-x1')^2 x2 x2-x2'
total Σx1 Σ(x1-x1')^2 Σx2
mean

sample variance = [Σ(xj-xj')^2]/(n-1)

Second estimate of the population variance = Σ[(nj-1)*sample variance of j] / (total elements-no.o

F ratio = larger variance / smaller variance

For looking the values from the table

degree of freedom for numerator = DOF for larger variance
degree of freedom for denomiantor = DOF for smaller variance
 If calculated value lies within the tabulated value null hypothesis is accepted

F distribution

For small number of degree of freedom the curve is skewed extremely to the right and as the number of DOF increa
tends to become symmetrical. Area under curve need not be 1.

In F distribution there are 2 degrees of freedom. N1/N2. for numerator we move column wise and for denominator w
 ANOVA
re than two sample means are significant or not

ssumptions made in ANOVA

be normal and have the same variance. Discarded if sample is large
ation variance. One estimate is obtained from variance among
tion that exists within the samples.

Steps in ANOVA

nce that exists among the sample means or between column variance
nce that exists within the samples.
or else reject the null hypothesis.

atio of the two estimates as either exactly or nearer to 1. this is referred to as F ratio.

e means
nj(xj'-xj")^2

ce wihin the samples

sample 2 sample 3
(x2-x2')^2 x3 x3-x3' (x3-x3')^2
Σ(x2-x2')^2 Σx3 Σ(x3-x3')^2

e variance of j] / (total elements-no.of sample)

ight and as the number of DOF increases the distribution

ve column wise and for denominator we move row wise.

Random Variable - A variable which assumes different numerical values as a result of random experime

if the random variable can assume any value within a given range, it is called
if the random variable can assume only a limited no. of values it is called

Expected Value/Mean of probability

distribution = E[X] = Σ[X*P(X)] Expected value refers to the value observed on the a
what we expect to happen if such an experiment were
where X = values given to what wuld happen in any single rand
P(X) = probability of X

Standardising a random variable

If X is a random variable with E[X] = μ and variance[X] = σ^2, then

Y = (X-μ)/σ is a random variable with mean 0 ans standard deviation 1

Covariance measure of
the variability of one variable or data set in relation to another is
covariance
if variable x = variable y then covariance = variance of either X or Y
Computation of Covariance
ungrouped data - CovXY = [Σ(X-μX)(Y-μY)] / N
where μX = arithmetic mean of X
μY = arithmetic mean of Y

N = no. of observations in each population

paired sample - CovXY = [Σ(X-X')(Y-Y')] / (n-1)

where X' = arithmetic mean of sample [X]
Y' = arithmetic mean of sample [Y]
N = no. of observations in each sample
grouped data - Cov XY = [Σf(X-μX)(Y-μY)] / Σf
where f is the frequency of corresponding (X,Y) values
μX = mean of X
μY = mean of Y
negative sign shows negative correlation between X and Y
Given a probability diatribution of paired data (X,Y)
Cov XY = Σ[X-E(X)][Y-E(Y)]P(X,Y)

E(Σak*Xk) = Σak*E(Xk)
V(Σak*Xk) = Σak^2 * V(Xk) + 2 Σai*aj Cov(Xi,Xj)
refer page 245

Continuous Uniform Distribution

X=value after decimal point
hence 0 <= X < 1
and each value is equally likely
then X is having a continuous uniform distribution

μ = E(X) = (a+b)/2

σ^2 = V(X) = [(b-a)^2] / 12

Standard Normal Distribution

μ = 0 and σ = 1
observation values = Z

Standard Normal Variables

Z = (X-μ) / σ
where X = value of any random variable
μ = mean of distribution of the random variable
σ = standard deviation of the distribution
Z = number of standard deviations from X to the mean of the distribution
and is known as the Z score or standard score.

The f ditribution

it is the distribution of the ratio of 2 random variables

also known as χ^2 distribution

df for numerator is n1 and denominator is n2

Decision Theory
Decision Making under conitions of Uncertainty
1) Maximin Rule - pessimistic - For each option minimum possible payoff is calculated and the option in w
payoff is the largest is selected.
2) Maximax Rule - optimistic - Maximum payoff is calculated for each option and the option having the gr
payoff is selcted.
3) Minimax Rule - the problems in which costs are to be minimised this is used. - first find the maximum c
alternative, and hence select the minimum of the maximum.

4) Minimin Rule - the minimum of cost for each act is considered and the act which minimises the minimu

5) Hurwicz Criteria - neither pessimist nor optimist

α= 1 if pessimist and α=0 if optimist. Hnece 0<=α<=1
Hurwicz Factor (H) = α(maximum pay off)+(1-α)(minimum pay off)
H = coefficient of optimism * maximum payoff + coefficient of pessimism * minimum payoff
The alternative for which this factor is maximum is chosen.
In the case of costs H = α(minimum of costs) + (1-α)(maximum of costs)
The alternative for which the sum of the products is least is selected.
6) Regret Criterion - based upon the regret one might have from making a particular decision.

Regret = oppurtunity cost or loss = maximum profit one would have realized in case of known state of nat

decision maker should strive to minimize the largest regret.

Example
strategy S1 S2 S3 strategy gains in investment strategy
A 20000 2000 1000 S1 S2
B 30000 27000 -16000 A 40000-20000 27000-2000
C 40000 15000 -40000 B 40000-30000 27000-27000
C 40000-40000 27000-15000

Decision Making under conditions of Risk

Decision maker has sufficient knowledge to assign probabilites to their likelihoods of occurrence.
Refer to Example 16 on Page 256

Expected value of perfect information

The expected value of perfect information is the difference between the expected profit under certainty a
profit without any predictions of the future s clculted before.
Refer Page 258

Decision Tree - mathematical model of the decision situation. Al models contaion decisio nodes na
A decision node from which one of several alternatives may be chosen
A state of nature node out of which one state of nature will occur.

Example (Page no.259 and 260)

Set up a new plant
Vey high demand - earn Rs. 5 million per annum
Low demand - earn Rs. 2 million per annum
probability thet demand is high = 0.55
cost of large plant = Rs. 10 million
Cost of small palnt = Rs. 5 million
Firm can set up either of two
Plant will take 1 year to build and no profits are earnedin year 1
estimated life = 4years
in case of high demand firm can expand small plant in year at an additional cost of Rs. 6 million
in case of low demand firm can reduce the large plant in year 2 and recover Rs. 3 million
in both these cases no profit will be earned in year 2

Decision Tree
high (0.55)

low(0.45) Reduce (+) Rs.3

Rs 15.05
large plant Not reduce
Rs 10 mn Rs 9

Rs. 15.05
 Rs 9 Expand (-) Rs. 6
small plant
Rs 5 mn Not Expand
Hence firm should Rs 8.55 high (0.55)
decide to to set up a
large plant and in low (0.45)
case of low demand
reduce its size
Problem in adecision tree is solves from right to left. At every decision node the decision maker
him the highest incom. The value at the state of the nature node is obtained by adding the produc
of nature and their respective probabilites

Marginal analysis
At a particular Activity level
Marginal Profit (MP) is the additional profit generated by increasing our activity level by one unit.
Marginl Loss (ML) is the loss incurred by increasing our activity level by one unit ad not profiting by it.
P is the probability of generating the additional profit by icreasing our activity level by one unit.
1-P is the probability of incurring loss by increasing our activity level by one unit.
expected (MP) = P*MP
Expcted (ML) = (1-P)*ML
Optimum Level occurs when Expected (MP) = Expcted (ML)
P'=ML/(MP+ML)
P' represents the minimum required probability of selling at least one additional unit to justify the stocking
 result of random experiments or random occurences

e, it is called continuous random variable

s it is called discrete random variable.

e value observed on the average. It is the mean value of

f such an experiment were repeated and it does not refer
happen in any single random experiment.

Continuous random variable - which can take any

value. Also since the outcomes are infinite probability of
each is 0 and P(sample space) = 1

refer example 4, pg. 240 in book

Standard Discrete Uniform Distribution

μ = E(X) = (K+1)/2
σ^2 = V(X) = (K^2 - 1) / 12

Binomial Distribution / Bernoulli Experiment

Let X = number of successes in n trials
P(X=x) = nCr * p^r*q^(n-r)
where r - 0,1,2 ……..,n
A bernoulli experiment has only two outcomes success or failure and also
this type of sampling is called sampling with replacement
Bernoulli process
1. each trial has only two outcomes
2. the probability of the outcome of any trial remains fixed over time
3. the trials are statistically indepnedent
Binomial distribution
μ = E(X) = np
σ^2 = V(X) = npq
where p= P(Success)
q = P(failure)

Hypergeometric Distribution
It is Bernoullii experiment is repeated without replacement
If X = number of success
P(X=x)= [MCx * (N-M)C(n-x)] / NCn

Normal Distribution
X' = Sample mean and μ = population mean
characteristics
 1. has a single peak; that is unimodal
2. mean lies at the center of its normal curve
3. median and mode are also at the centre
4. two tails of the normal probability distribution extend indefinitely and never
touch the horizontal axis.
80% of observation will be in interval μ-1.28σ to μ+1.28σ
95% of observation will be in interval μ-1.96σ to μ+1.96σ
98% of observation will be in interval μ-2.33σ to μ+2.33σ

The t Distribution
t distribution is symmetrical, bell shaped, similar to standard normal curve, and has an additional
parameter called degree of freedom and is centerd at zero.
Degree of Freedom (df) cab be any real number greater than 0
Example - X + Y = 4. Once we fix value of X, Y can be determined. Hence df = 1
t distribution with n-1 df = (X' - μ) / (S/√n)
where X' = The sample mean
μ = Population Mean

S = Sample standard deviation

n = The sample size

Standard Normal Curve is a special case of t distribution when df = infinity and for
practical purposes when when df=30 the two are almost identical

t distribution with smaller df hve more area in tails than one with larger df and as it gets larger the
t ditribution approaches the standard normal distribution.
Hence, t distribution is used when df<30, or when population standard deviation is
unknown

culated and the option in which minimum

d the option having the greatest maximum

. - first find the maximum cost for each

hich minimises the minimum cost is taken

minimum payoff
 particular decision.

case of known state of nature - actual realized

nt strategy Srategy S1 S2 S3 Maximum Regret

S3 A 20000 25000 0 25000
1000-1000 B 10000 0 17000 17000
1000-(-16000) C 0 12000 41000 41000
1000-(-40000)

ds of occurrence.

ted profit under certainty and the best expected monthly

e s clculted before.

ontaion decisio nodes nad state of nature nodes

st of Rs. 6 million

Rs. 20

duce (+) Rs.3 Rs. 6

Rs. 8
pand (-) Rs. 6 Rs. 15

Rs 8

Rs. 8

node the decision maker chooses that alternative which givs

ed by adding the product of the incomes of the various states
ive probabilites

evel by one unit.

t ad not profiting by it.
vel by one unit.

unit to justify the stocking of that additional unit.

M = no. of success events
N = total no. of events
p = M/N
q =1-p
X = random variable
and X = number of success in n trials
 A POPULATION is a collection of all the data points being studied.
A SAMPLE is a part of a population

population sample
characteristic
parameter statistic
size N n
mean μ X'
σ
standard deviation S
proportion p p'

Types of Sampling
Sampling

Random Sampling Judgemental Sampling

Simple random Stratified random systematic sampling cluster sampling

sampling sampling

Judgemental Sampling - the sample is selected according to the judgement of the investigators or experts.
Random Sampling - every element of the population has a known chance of being included in the sample.
Simple random sampling - each possible sample has an equal chance of being selected.
Stratified sampling - used when the population is heterogeneous. The population is first subdivided into several pa
is called a sub-population. Then a small sub sample is selected from each stratum at random. All the sub samples co
stratified sample.
Systematic Sampling - each element has an equal chance of being selected, but each sample does not have the s
The first element of the population is chosen randomly, but thereafter the elements are selected according to a syste
Cluster Sampling - population is divided into clusters and then random sampling is done for each cluster. Each clus

Errors

Non sampling errors

Caused by deficiencies in the collection and editing of data
3 Reasons
Procedural bias - distortion of the representativeness of the data due to the procedure adopted in collec
Biased observations - observations do not correctly reflect the characteristics of the population being st
Non response bias - absence of response

Sampling Error
difference between the value of the actual population parameter and the sample statistic

Sampling Distribution
only a static has a sampling distribution
Variation in the value of statistic is called sampling fluctuation. A parameter has no fluctuation.
ators or experts.
d in the sample.

ubdivided into several parts called strata. Each stratum

m. All the sub samples combined together form the

mple does not have the same chance of being selected.

cted according to a systematic plan.
r each cluster. Each cluster is representative of the population

cedure adopted in collecting the data.

f the population being studied.
Time Series Analysis
Identify and determine the pattern of changes in the data collected over regular interval of time. The data collected is

Classification of Time Series

1) the secular trend
2) the cyclical fluctuations
3) the seasonal variation
4) the irregular variation

Secular trend - we look at long term behaviour of the variable. Helps to conclude whether the value of the variable
the years, keeping aside the variationobsered in individual years.

Y
actual series

Secular trend line

time In years X
Equation of straight line is Y = a +bX

Cyclical Variation - long term movement of the variable about the trend line.

Cyclical variation

Trend line

X
time in years

RESIDUAL METHOD
This method can be used to isolate the cyclical variation component.
this method can be bifurcated into two measures
1) percent of trend
2) relative cyclical residual measures.

percent of trend measure relative cyclical residual measure

(Y/Y')*100 [(Y-Y')/Y']*100

X Y X-X' XY X^2 Y'

 X' = ΣX/n Y' = ΣY/n
a=Y' b=ΣXY/ΣX^2

Seasonal variation - we observe that the variable under consideration shows a similar pattern during certain month

seasonal variation

METHOD TO IDENTIFY THE COMPONENT OF SEASONAL VARIATION IN A TIME SERIES

RATIO TO MOVING AVERAGES METHOD

STEP 1 we comput the moving total

STEP 2 calculate the average of themoving toatal calculated in step 1
STEP 3 if the data points are even we center the moving averages.
STEP 4 calculate the percentage of the actual data to the centered moving average values.
STEP 5 calculate themodified mean for each quarter and take their sum.
STEP 6 calculate the adjusting factor = total of index of eachodified mean/sum of modified mean . Mu

DESEASONALIZING A TIME SERIES

it involves dividing the original data points with the relevant seasonal index expressed as percentage

Irregular variation - highly unpredictable, period will be short generally days, weeks and may be months.
interval of time. The data collected is at a periodical interval of time.

ude whether the value of the variable has been increasing or decreasing over
ationobsered in individual years.

clical residual measure

percent trend relative cyclical residual

a similar pattern during certain months of the successive years.

A TIME SERIES

ed moving average values.

ed mean/sum of modified mean . Multipliaction with moified mean gives us the adjusted means

ressed as percentage

weeks and may be months.