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P3 Exam December 2013 – Question 2

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBL Exams › P3 Exam December 2013 – Question 2

  • This topic has 1 reply, 2 voices, and was last updated 10 years ago by Ken Garrett.
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  • February 16, 2016 at 4:23 am #300635
    Sophie
    Member
    • Topics: 6
    • Replies: 20
    • ☆

    Dear Sir,

    There is one paragraph in the answers of Question 2 that I could not understand:

    Using a ‘best guess’ approach, a trend value of 149 might be hypothesised for quarter 1 of 2013, giving a predicted value of 134·3 (149 – 14·7), just below the actual recorded value of 137. Predicted values would also be calculated for subsequent quarters. For example,
    based on a (hand drawn) trend value of 151, the predicted value for quarter 3 of 2013 would be 173·55 (151 + 22·55), which subjectively seems much more realistic than the 152·55 suggested by the least squares analysis.

    Could you provide a more detailed explaination what basis for the statement of “based on a (hand drawn) trend value of 151”. I could not firgue out why they choose 151.

    Thanks in advance.

    February 16, 2016 at 9:23 am #300655
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10649
    • ☆☆☆☆☆

    There is nothing special about 151. A hand drawn trend will be approximate. Something around 150 is as good as it gets.

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