__________ is the amount by which the predicted value differs from the observed value of the time series variable.
A)Mean forecast error
B)Mean absolute error
C)Smoothing constant
D)Forecast error

Question

Quizplus · Accepted Answer

Forecast error is defined as the difference between the predicted value and the observed value of the time series variable. Therefore, option D is the correct answer. Option A, mean forecast error, is a measure of the average difference between the forecasted value and the actual value over a period of time. Option B, mean absolute error, is a measure of the absolute difference between the forecasted value and the actual value over a period of time. Option C, smoothing constant, is a parameter used in exponential smoothing methods to give higher weightage to recent observations in the data.

__________ Is the Amount by Which the Predicted Value Differs