For the given five values, 3.6, 4.3, 4.3, 3.4, 4.4, the three years moving averages are:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 4.067, 4.00, 4.03
A 3-year moving average is the mean of three consecutive values; the window then moves on by one value. Five values give three averages:
\( \displaystyle \frac{3.6 + 4.3 + 4.3}{3} = \frac{12.2}{3} = 4.067 \)
\( \displaystyle \frac{4.3 + 4.3 + 3.4}{3} = \frac{12.0}{3} = 4.00 \)
\( \displaystyle \frac{4.3 + 3.4 + 4.4}{3} = \frac{12.1}{3} = 4.03 \)
So the moving averages are 4.067, 4.00 and 4.03. The numbers 12.2, 12.0 and 12.1 in Option (1) are only the 3-year moving totals; each must still be divided by 3.