CAIIB · ABM · Chapter 5

Time Series Analysis

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Advanced Bank Management — CAIIB.

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Q

Define time series analysis in banking context.

A

Statistical technique applied to data recorded against a time base to forecast deposits, credit, NPAs, and other metrics.

Q

What are the two variables in every time-series problem?

A

Dependent variable (value measured: deposits, NPA %, exchange rate) and independent variable (time).

Q

Name four purposes of time series analysis in banking.

A

Review historical baseline, study past behaviour, compare across periods, predict future, forecast trade cycles.

Q

Define secular trend and distinguish linear from curvilinear.

A

Long-period smooth direction. Linear: constant rate of change. Curvilinear: rate of change itself shifts over time.

Q

What is cyclical variation? State typical duration and average business cycle length in India.

A

Wave-like movements with no fixed periodicity, unequal amplitude, span >1 year. India's cycle averages 5–9 years.

Q

Name the four trade-cycle phases.

A

Prosperity → Recession → Depression → Recovery.

Q

Define seasonal variation and give three banking examples.

A

Patterns repeating within a year with regular, predictable timing. ATM spikes on 1st/last workday; jewellery loans Aug–Oct; advance-tax outflows March.

Q

What is deseasonalisation and why does RBI apply it?

A

Removing established seasonal pattern from series to expose underlying trend. RBI publishes seasonally adjusted IIP and money supply for month-on-month apples-to-apples comparison.

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