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:

Market Value

The present-day trading price for assets or services available in the open market.

Book Value

The net value of a company's assets as found on its balance sheet, which is often different from its market value.

Net Income Ratio

A financial metric that calculates how much net income is generated as a percentage of revenues, showcasing profit efficiency.

Revenue Account

An account that tracks the income earned by a business, from sales or other sources, during an accounting period.