A Danger of Forecasting Discussed in the Text Is That

question 109

Multiple Choice

A danger of forecasting discussed in the text is that

• A)in most cases, the expense of collecting the necessary data exceeds the benefit.
• B)the retrospective nature of forecasting provides little information about the future.
• C)managers may view uncertainty as black and white while ignoring important gray areas.
• D)it can create legal problems for the firm if regulators discover the company is making forecasts.

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Definitions:

Expected Value

The weighted average of all possible values of a random variable, weighted by their respective probabilities.

Simple Linear Regression

A method of fitting a straight line through a set of data points to model a linear relationship between two variables.

Prediction Interval

An interval estimate of a real-valued observation based on a sample of data predicting where an individual measurement will fall.

Particular Value

A specific or distinct value within a set or range of data.