Silicon Co. has forecasted the Canadian dollar for the most recent period to be $0.73. The realized value of the Canadian dollar in the most recent period was $0.80. Thus, the absolute forecast error as a percentage of the realized value was ____ percent.

Question

Silicon Co. has forecasted the Canadian dollar for the most recent period to be $0.73. The realized value of the Canadian dollar in the most recent period was $0.80. Thus, the absolute forecast error as a percentage of the realized value was ____ percent.​

Quizplus · Accepted Answer

The absolute forecast error as a percentage of the realized value is calculated as |(Forecasted Value - Realized Value) / Realized Value| * 100. Substituting the given values: |($0.73 - $0.80) / $0.80| * 100 = |(-$0.07) / $0.80| * 100 = 8.75%, which rounds to 8.8%.