Why Is the Variance of the Forecast Y Larger Than $\sigma$

question 15

Multiple Choice

Why is the variance of the forecast y larger than the variance of the expected value of y?

• A)the estimated forecast variance includes an estimate of \(\sigma\)²
• B)the estimated forecast variance includes weighted covariance terms of all paired variables
• C)the Gauss-Markov theorem does not apply to forecast of a single observation
• D)the expected value of confidence intervals rely on the standard normal distribution while forecast use a t distribution.

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