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Trend

Trend is distinguished from regular seasonal movements and irregular fluctuations. It may be estimated with moving averages or a fitted line, depending on the question. A forecast extends a model beyond observed data, so examine the evidence and limits of extrapolation.

Worked example

A fitted monthly trend is 100 + 5t units. At t = 4 the trend estimate is 120 units, before any seasonal adjustment.

Common mistake

Treating a single month’s unexpected movement as a change in long-term trend without further evidence.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA MA Direct September 2026–June 2027
FIA FMA Direct September 2026–June 2027