When forecast errors occur in a normally distributed pattern, the ratio of the mean absolute deviation to the standard deviation is 2 to 1, or 2 × MAD = 1 standard deviation.

Question

Quizplus · Accepted Answer

The ratio of the mean absolute deviation (MAD) to the standard deviation for a normally distributed pattern is approximately 1 to 1.25, not 2 to 1. This means that the standard deviation is roughly 1.25 times the MAD in a normal distribution.

When Forecast Errors Occur in a Normally Distributed Pattern, the Ratio