The Actual and Forecast Values of a Time Series Are

question 57

Essay

The actual and forecast values of a time series are shown below. $$\begin{array} { | c c | } \hline \text { Actual values } y _ { t } & \text { Forecast values } F _ { t } \\\hline 2325 & 2330 \\2555 & 2595 \\2835 & 2860 \\3185 & 3125 \\3510 & 3390 \\\hline\end{array}$$ a. Calculate the mean absolute deviation (MAD).
b. Calculate the sum of squares for forecast error (SSE).

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Definitions:

Stock Price

The current price at which a particular stock is bought or sold in the market.

Exercise Price

The price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying security.

Time Value

The concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

In-The-Money

A term describing an option contract that has intrinsic value, meaning it would be profitable to exercise the option immediately.