The previous trend line had predicted 18,500 for two years ago, and 19,700 for last year.What was the mean absolute deviation (MAD) for these forecasts?
A)100
B)200
C)400
D)500
E)800

Question

Quizplus · Accepted Answer

To find the MAD, we need to take the absolute value of the difference between the actual values and predicted values, then find the average of these absolute differences. 
For two years ago: 
|MAD| = |18,500 - Forecasted amount| = |18,500 - 18,500| = 0 
For last year: 
|MAD| = |19,700 - Forecasted amount| = |19,700 - 19,700| = 0 
The MAD for both years is zero because the forecasts were exactly the same as the predicted values. However, if we assume that the predicted values are actually the forecasts and there was no error, then the MAD would be zero. Therefore, we cannot determine the MAD for this question.

The Previous Trend Line Had Predicted 18,500 for Two Years