The mean absolute deviation averages the absolute differences between the actual values of the time series at time t and the forecast values at time:
A)t + 1
B)t
C)t− 1
D)t− 2

Question

Quizplus · Accepted Answer

The mean absolute deviation (MAD) measures the average difference between the actual values and the forecast values. It is calculated as the average of the absolute differences between the actual and forecast values at each time point. Therefore, the time t is the reference point for the forecast, and the actual values are compared to the forecast values at that time point (t). Hence, the best choice is B, which corresponds to time t.

The Mean Absolute Deviation Averages the Absolute Differences Between the Actual