NISM Certifications · NISM-Series-XV: Research Analyst · Fundamentals of Research
An analyst uses 5 years of a company's reported sales to estimate next year's sales by fitting a straight line to the past data. Which type of data and method is this?
This is time-series data with trend extrapolation. The sales figures are observations of one company across successive years, and projecting a fitted straight line into the future is a standard trend-based forecasting method, unlike cross-sectional comparison across firms or survey-based primary research.
- ACross-sectional data with a qualitative method
- BPrimary data with a survey method
- CTime-series data with a trend extrapolation methodCorrect
- DPanel data with a Delphi method
Explanation
Data of one company over successive years is time-series data. Fitting a line to past values and projecting it forward is trend extrapolation. Cross-sectional data would compare many firms at one point in time.
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