If Forecast Errors Are Normally Distributed Then

question 45

Multiple Choice

If forecast errors are normally distributed then

• A)1 MAD = 1σ
• B)1 MAD ≈ 0.8 σ
• C)0.8 MAD ≈ 1σ
• D)1 MAD ≈ 1.96 σ

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Definitions:

True Score

The theoretical perfect score that would be obtained if there were no measurement errors in a test.

Measurement Error

The difference between the observed value and the true value of a variable, due to imprecision in measurement tools or techniques.

Reactivity

The phenomenon in which the presence of an observer or the awareness of being measured alters the behavior or responses of subjects.

Variability

The degree to which scores in a dataset differ from each other and from their average.