XYZ Company, Annual Data Based on the Information Given

question 56

Multiple Choice

XYZ Company, Annual Data Based on the information given in the table above, what is the average forecast error?

• A) -1.3333
• B) 1.6667
• C) -2.5
• D) -3.3333
• E) 4.5

---

Definitions:

Mean-Variance Criterion

An investment principle where portfolios are selected based on their expected returns (mean) and the variability of those returns (variance), aiming to optimize the trade-off between risk and return.

Expected Return

The average return on an investment anticipated over a specified period based on historical or estimated future performance.

Variance

A statistical measure of the dispersion of a set of data points or portfolio returns, indicating how much the values differ from the average.

Indifference Curves

Graphical representations in economics to show different combinations of goods or services among which a consumer is indifferent.