Table 108
a Manager Wants to Forecast the Monthly Demand
for

question 151

Multiple Choice

Table 10.8
A manager wants to forecast the monthly demand
for a machine the company produces.
$$\begin{array} { | c | c | } \hline \text { Month } & \begin{array} { c } \text { No. Machines } \\\text { Sold }\end{array} \\\hline 1 & 50 \\2 & 65 \\3 & 52 \\4 & 56 \\5 & 55 \\6 & 60 \\\hline\end{array}$$
-Use the information in Table 10.8.Forecast the demand for the machine for month 7,using the three-month moving average method.

• A) less than or equal to 56
• B) greater than 56 but less than or equal to 58
• C) greater than 58 but less than or equal to 61
• D) greater than 61

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Definitions:

Capital Market Line

In the capital asset pricing model, a line that describes the risk-return trade-off for efficient portfolios, showing that higher risk leads to higher expected return.

Measurement Error

The difference between a measured value of quantity and its true value, often due to imperfections in measurement tools or techniques.

Black, Jensen, and Scholes

Refers to scholars who contributed to the development of financial theories and models, most notably the Black-Scholes model for pricing options.

Two-Stage Regression

A statistical analysis method used when there are indirect causal relationships, involving first regressing an independent variable on an instrumenting variable, then the outcome on the fitted values from the first stage.