Cyclical variation in time series analysis, Financial Management

Assignment Help:

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.


Related Discussions:- Cyclical variation in time series analysis

Future value, (a).At the end of three years, how much is an initial deposit...

(a).At the end of three years, how much is an initial deposit of $100 worth, assuming a compound annual interest rate of (i) 100 percent? (ii) 10 percent? (iii) 0 percent? (b).b. A

Challenges facing by the finance manager, FUNCTIONS / RESPONSIBILITIES / CH...

FUNCTIONS / RESPONSIBILITIES / CHALLENGES FACING THE FINANCE MANAGER Today's finance manager is facing a lot of challenges, which are the direct result of the dynamic growth in

Explain some examples under fasb 52, Explain some Examples under FASB 52 th...

Explain some Examples under FASB 52 that a foreign entity's functional currency would be similar as the parent firm's currency. Answer:  Three instances under FASB 52, in which

Cash outflows and income statement of a company, a. You only need to compl...

a. You only need to complete the 2012 column, leave the 2011 column as is. b. Base you net income and certain other information needed from the income statement you completed in

Cost of capital, Provide an argument for including or not current liabiliti...

Provide an argument for including or not current liabilities in the cost of capital calculation.

Public provident fund, Public Provident Fund (ppf) The Public Provident...

Public Provident Fund (ppf) The Public Provident Fund (PPF) scheme was started in 1968-69 with the aim to provide a financial instrument to workers in the unorganized sector to

Critically evaluate data & resources-critically analyse, Crown casino recen...

Crown casino recently announced its intention to build a new 500-room luxury hotel in Perth costing approximately $568 million. As part of the agreement, the WA government has agre

Define discounting the cash flows in the apv model, What is the intuition o...

What is the intuition of discounting the several cash flows in the APV model at fixed discount rates? The APV model is a value-additivity method where total value is defined by t

Analyse consumer behaviour, Eatmore & Green Pty. Ltd (Australia) is a succe...

Eatmore & Green Pty. Ltd (Australia) is a successful medium sized marketing consultancy for Australian agricultural products and Australian sourced organic, natural beauty/cosmetic

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd