A Forecasting Method Has Produced the Following Over the Past

question 76

Multiple Choice

A forecasting method has produced the following over the past five months. What is the mean absolute deviation?
$\begin{array}{|c|c|c|c|}\hline \text { Actual } & \text { Forecast } & \text { Error } & \mid \text { Error } \mid \\\hline 10 & 11 & -1 & 1 \\\hline 8 & 10 & -2 & 2 \\\hline 10 & 8 & 2 & 2 \\\hline 6 & 6 & 0 & 0 \\\hline 9 & 8 & 1 & 1 \\\hline\end{array}$

• A) -0.2
• B) -1.0
• C) 0.0
• D) 1.2
• E) 8.6

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Definitions:

Dividend Growth Model

A valuation method used to estimate the value of a stock by using predicted dividends and the growth rate of those dividends.

Capital Gains

The profit realized from the sale of assets like stocks, bonds, or real estate when the sale price exceeds the purchase price.

Dividend Yield

The annual dividends a firm distributes, expressed as a ratio of its current stock price.

Taxable Income

The portion of an individual's or corporation's income used as the basis for calculating tax owed to the government, after all allowable deductions or exemptions.