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
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | MA | Direct | September 2026–June 2027 |
| FIA | FMA | Direct | September 2026–June 2027 |
