THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
The table below is the data set of the Shiller Real Home Price Index for the years 1894-1904.
Use a smoothing constant of α = 0.8 to determine the forecasts using simple exponential smoothing.

-Determine the error for the forecast that corresponds to the year 1899.
A)0.50
B)-3.69
C)-5.50
D)10.16

Question

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
The table below is the data set of the Shiller Real Home Price Index for the years 1894-1904.
Use a smoothing constant of α = 0.8 to determine the forecasts using simple exponential smoothing.
 
-Determine the error for the forecast that corresponds to the year 1899.
A)0.50 
B)-3.69 
C)-5.50 
D)10.16

Quizplus · Accepted Answer

The error for a forecast is calculated as the actual value minus the forecasted value. The choice that represents this calculation for the year 1899 is -5.50.