If a Firm Produced a Standard Item with Relatively Stable

question 51

Multiple Choice

If a firm produced a standard item with relatively stable demand, the smoothing constant alpha (reaction rate to differences) used in an exponential smoothing forecasting model would tend to be in which of the following ranges?

• A) 5 to 10 percent
• B) 20 to 50 percent
• C) 20 to 80 percent
• D) 60 to 120 percent
• E) 90 to 100 percent

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Definitions:

Standard Deviation

A statistical measure of the dispersion or variability of a set of data points, commonly used in finance to assess the volatility of an investment's returns.

Market Return

The total return on investment in the stock market, including both capital gains and dividends.

Risk Free Rate

An interest rate at which an investor expects to earn on an investment with zero risk.

Expected Constant Growth Rate

The steady rate at which a company’s dividends or earnings are anticipated to grow indefinitely.