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Rather than changing by a constant amount each period as with the gradient series, the geometric series changes by a constant percentage each period.

Rather than changing by a constant amount each period as with the gradient series, the geometric series changes by a constant percentage each period.

Essentials of Business Analytics (MindTap Course List)
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter8: Time Series Analysis And_forecasting
Section: Chapter Questions
Problem 17P: Consider the following time series: a. Construct a time series plot. What type of pattern exists in...
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Can some one please help me to solve this question? Please and thank you!!
Rather than changing by a constant amount each period as with the gradient series, the geometric series changes by a constant percentage each period. a) True b) False
Transcribed Image Text:Rather than changing by a constant amount each period as with the gradient series, the geometric series changes by a constant percentage each period. a) True b) False
Expert Solution
Step 1

Gradient Series:

The payments are uniformly spaced by a constant amount from one period to the next period in arithmetic series.

For example, the Year 1 payment is $500, and the further payment increases by $100 (constant amount).

Therefore, Year 2 payment is $600 ($500 + $100) and Year 3 payment is $700 ($600 + $100) & so on for later payments.

 

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