If You Suspect That Your Trend Forecasting Model May Have

question 16

Multiple Choice

If you suspect that your trend forecasting model may have autocorrelated forecast errors, which the following should you compute?

• A) The MAD
• B) The standard error of the estimate
• C) The Durbin-Watson test statistic
• D) The correlation coefficient

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Definitions:

Allowance For Doubtful Accounts

A contra-asset account that reduces the total receivables on the balance sheet by the amount expected not to be collected.

ROCE

Return on Capital Employed; a financial ratio that measures a company's profitability and the efficiency with which its capital is employed.

Operating Profit Margin

A profitability ratio calculated by dividing operating profit by total revenue, reflecting the percentage of revenue that is left over after paying for variable costs of production.

Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets to generate sales or revenue.