What effect does the value of the smoothing constant have on the weight given to the recent values?

QUESTION:

What effect does the value of the smoothing constant have on the weight given to the recent values?

 

SOLUTION

When the smoothing constant,

  • a, is large (close to 1.0),
  • More weight is given to recent data;
  • When a is low (close to 0.0),
  • More weight is given to past data.

 

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