Which of the following leads to large forecast errors? A)larger sample size,N B)variation in the explanatory variable,x,is large C)overall uncertainty in the model,as measured by $\sigma$²,is smaller D)the value of (x₀ - x̄)² is larger

Question

Quizplus · Accepted Answer

A larger value of (x₀ - x̄)² indicates that the forecast point x₀ is far from the mean of the sample data, leading to larger forecast errors due to extrapolation.

Which of the Following Leads to Large Forecast Errors? A)larger σ\sigmaσ

Which of the Following Leads to Large Forecast Errors?
A)larger $\sigma$