Long-term forecasts are usually less accurate than short-term forecasts because
A) short-term forecasts have a larger standard deviation of error relative to the mean than long-term forecasts.
B) short-term forecasts have more standard deviation of error relative to the mean than long-term forecasts.
C) long-term forecasts have a smaller standard deviation of error relative to the mean than short-term forecasts.
D) long-term forecasts have a larger standard deviation of error relative to the mean than short-term forecasts.
E) none of the above

Question

Quizplus · Accepted Answer

Long-term forecasts are influenced by many unknown factors and variables that can change over a longer period of time, which makes them less accurate compared to short-term forecasts. This results in a larger standard deviation of error relative to the mean for long-term forecasts. Hence, option D is the correct answer.

Long-Term Forecasts Are Usually Less Accurate Than Short-Term Forecasts Because