Cyclical variation in time series analysis, Financial Management

Cyclical Variation

By cyclical variations, we refer to the long-term movement of the variable about the trend line. Therefore, does the movement of the actual series about a trend line observed in figure (1) suggest a pattern of cyclical variation? Yes, it does. A more appropriate example of cyclical variation would be the pattern of business cycle. The whole cycle encompassing the phenomena of the business activity reaching a high, its gradual slow down, a depression and then the recovery can be observed. But one of the points to which we have to pay attention is that the business and the economic cycles may not be periodic in nature. That is, in two different business cycles, at equal intervals of time, the pattern observed may be different.

Generally, the behavior of the variable is considered to be cyclic, only if the movements recur after a period of more than one year. The cyclical variation is shown in the figure.

Figure 

1579_cyclical variation.png

In the figure, we observe the component of the time series moving towards and away from the secular trend.

Posted Date: 9/17/2012 3:28:47 AM | Location : United States







Related Discussions:- Cyclical variation in time series analysis, Assignment Help, Ask Question on Cyclical variation in time series analysis, Get Answer, Expert's Help, Cyclical variation in time series analysis Discussions

Write discussion on Cyclical variation in time series analysis
Your posts are moderated
Related Questions
An Investor can receive income from this source when the bonds purchased at discount are held up to maturity or when he sells the bond before ma

You are the chief financial office (CFO) of Gaga Enterprises, edgy fashion design firm. Your firm needs $10 million to expand production. How do you think the process of raising th

What are the options available for growth Joint venture   A joint venture is when a separate company is formed, in which every member holds an equity st


Is it possible for a company with a positive net income and which does not distribute dividends to find itself in suspension of payments?  Yes. A lot of companies which entered

critically appraise baumol max. theory as an alternative objective of the firm

Illustrate the term quality of benefits It is clear from Table that total returns associated with two alternatives are identical in a normal situation but range of variati

A/A2 is generally the second- or third-highest rating that a rating agency gives to a security or carrier. This rating indicates that there is a comparatively low risk of default a

what is the value of beta for this fund ? If the benchmark index for this mutual fund increased by 11.00% during the period covered by beta measure, what was the rate of return for

What is Commercial Paper? Please provide me report on Estimation of Commercial Paper. It is about 2000 words count report on topic Commercial Paper.