If the Actual Value of a Time Series at Time $\mathrm{MAD}=\frac{\sum_{t=1}^{n}\left|A_{t}-F_{t}\right|}{n}$

question 4

Multiple Choice

If the actual value of a time series at time t and the forecast value for time t is denoted by At and Ft respectively, then the formula for the mean absolute deviation over a range of forecasted values is .

• A) \( \mathrm{MAD}=\frac{\sum_{t=1}^{n}\left|A_{t}-F_{t}\right|}{n} \)
• B) \( \mathrm{MAD}=\frac{\sum_{t=1}^{n}\left(A_{t}-F_{t} \mid\right)^{2}}{n} \)
• C) \( \mathrm{MAD}=\frac{\sum_{t=1}^{n} \sqrt{\left|A_{t}-F\right|}}{n} \)
• D) \( \mathrm{MAD}=\frac{\sum_{t=1}^{n}\left|\frac{A_{t}-F_{t}}{2}\right|}{n} \)

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Definitions:

Trial Balance

A Trial Balance is a bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns to ensure that total debits equal total credits.

Financial Statements

Reports that show the financial performance and position of a company, including the balance sheet, income statement, and cash flow statement.

Adjusting Entries

Journal entries made at the end of an accounting period to update the accounts for accruals and deferrals that have not been recorded during the period.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, thus resetting the temporary accounts for the next period.