The Measure of Forecast Error Where the Average Absolute Error

question 49

Multiple Choice

The measure of forecast error where the average absolute error of each forecast is shown as a percentage of demand is

• A) mean squared error (MSE).
• B) mean absolute deviation (MAD).
• C) mean absolute percentage error (MAPE).
• D) bias.
• E) the tracking signal.

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Definitions:

EPS Growth Rate

A measure of the annualized rate of increase in earnings per share of a company over time.

Rate of Return

The rate of return is the gain or loss on an investment over a specified period, expressed as a percentage of the investment’s cost.

Current Stock Price

The price at which a stock is trading on the public market at any given time.

Market Rate of Return

The average annual return generated from a market or a specific investment over a specific period, often considered a benchmark.