Exhibit 11.1
The following questions use the data below.
Honest Al's Used Cars wants to predict how many cars are sold each month. He has collected data for 12 months. He needs your help in analyzing this data using moving averages.
-Refer to Exhibit 11.1. What Excel function will compute the mean squared error in cell C18 of the spreadsheet?
A) =SUMXMY2(B7:B14,C7:C14)
B) =SUMXMY2(B3:B14,C3:C14)/COUNT(C3:C14)
C) =SUMXMY2(B7:B14,C7:C14)/COUNT(C7:C14)
D) =SUMPRODUCT(B7:B14,C7:C14)/COUNT(C7:C14)

Question

Exhibit 11.1
The following questions use the data below.
Honest Al's Used Cars wants to predict how many cars are sold each month. He has collected data for 12 months. He needs your help in analyzing this data using moving averages. 
-Refer to Exhibit 11.1. What Excel function will compute the mean squared error in cell C18 of the spreadsheet?
A) =SUMXMY2(B7:B14,C7:C14) 
B) =SUMXMY2(B3:B14,C3:C14)/COUNT(C3:C14) 
C) =SUMXMY2(B7:B14,C7:C14)/COUNT(C7:C14) 
D) =SUMPRODUCT(B7:B14,C7:C14)/COUNT(C7:C14)

Quizplus · Accepted Answer

The formula for mean squared error is the sum of the squared differences between the predicted values and the actual values, divided by the sample size. The formula in option C, =SUMXMY2(B7:B14,C7:C14)/COUNT(C7:C14), calculates this correctly using the given data in the spreadsheet. Options A and D do not properly calculate mean squared error, while option B divides by the wrong sample size.

Exhibit 11.1 The Following Questions Use the Data Below