Suppose a Firm Has Had the Historical Sales Figures Shown

question 70

Multiple Choice

Suppose a firm has had the historical sales figures shown as follows. What would be the forecast for next year's sales using the naïve approach?
$$\begin{array} { c c c c c c } \text { Year } & 2013 & 2014 & 2015 & 2016 & 2017 \\\text { Sales } & \$ 10,000,000 & \$ 10,500,000 & \$ 10,700,000 & \$ 11,000,000 & \$ 12,000,000\end{array}$$

• A) $10,000,000
• B) $10,550,000
• C) $10,840,000
• D) $12,000,000

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Definitions:

Construct Validity

The extent to which an assessment accurately gauges what it professes to evaluate.

Reliable

Pertains to the consistency of a measure or instrument; if the results are repeatable under the same conditions.

Valid

Refers to the extent to which a concept, conclusion, or measurement is well-founded and corresponds accurately to the real world.

Criterion Validity

Criterion validity refers to how well one measure predicts an outcome based on the criteria of another measure.