Based on the actual and forecasted returns for a social choice portfolio shown
Below, the MAD is $$\begin{array} { l c c }
\text { Month } & \text { Monthly Return } & \text { Forecast } \
\text { July } & 2.2 \% & 1.95 \% \
\text { August } & 2.5 & 2.21 \
\text { September } & 1.8 & 2.35 \
\text { October } & 1.4 & 2.15 \
\text { November } & 1.1 & 1.6 \
\text { December } & 1.9 & 1.2
\end{array}$$
A) 0.507
B) 2.344
C) 0.249
D) 1.531
E) None of the above

Question

Based on the actual and forecasted returns for a social choice portfolio shown
Below, the MAD is $$\begin{array} { l c c } 
\text { Month } & \text { Monthly Return } & \text { Forecast } \
\text { July } & 2.2 \% & 1.95 \% \
\text { August } & 2.5 & 2.21 \
\text { September } & 1.8 & 2.35 \
\text { October } & 1.4 & 2.15 \
\text { November } & 1.1 & 1.6 \
\text { December } & 1.9 & 1.2
\end{array}$$
A) 0.507
B) 2.344
C) 0.249
D) 1.531
E) None of the above

Quizplus · Accepted Answer

The Mean Absolute Deviation (MAD) is calculated by taking the average of the absolute differences between actual and forecasted returns. The differences are: 0.25, 0.29, 0.55, 0.75, 0.5, and 0.7. The average of these differences is 0.507.

Based on the Actual and Forecasted Returns for a Social