Detailed Answer
Answer (A) is correct. Time series analysis or trend analysis relies on past experience. Changes in the value of a variable (e.g., unit sales of a product) may have several possible components. In time series analysis, the dependent variable is regressed on time (the independent variable). The secular trend is the long-term change that occurs in a series. It is represented by a straight line or curve on a graph. Seasonal variations are common in many businesses. A variety of methods include seasonal variations in a forecasting model, but most methods adjust data by a seasonal index. Cyclical fluctuations are variations in the level of activity in business periods. Whereas some of these fluctuations are beyond the control of the firm, they need to be considered in forecasting. They are usually incorporated as index numbers. Irregular or random variations are any variations not included in the three categories above. Business can be affected by random happenings, e.g., weather, strikes, or fires.