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.


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
What is the role of investment banking in investment intermediaries? Investment banks: These banks assist corporations or governments into the issue of new debt or equity

What is an LBO? What are the risks for the equity investors and what are the potential rewards? A leveraged buyout is a buy of a publicly owned corporation by a small group of

Illustrations of substantive tests Agree a sample of wages payments to the existence of these individuals and personnel records. Agree a sample of cashbook payments to

How do mergers affect communities? A: While a locally controlled bank is merged into a bank headquartered somewhere else (an out-of-market merger), a few apprehension about the i

Q. Market condition Affecting cost of capital? Market condition: if an investor is purchasing a security where the risk of the investment in significant the opportunity for add

The financial manager of A expects that its EBIT in the current year is 10,000. The firm has 5% Deb. Amounting to Rs. 40,000., while 10% Pref. Share amounts to Rs. 20,000.

assume that risk free rate is 8% and expected rate of return in market is 12%. what is the required rate of return on stock with a beta of 0.8%

A niche market targets a well-defined and specific market segment. Firms that operate in niche markets will therefore cater for the precise and distinct needs of their customers. D

Q. What is usual Approach of capital Structure? Ans. Traditional Approach: - The traditional approach establishes middle among the Net Income approach and the Net Operating Inc