The forecaster who uses MSD (mean squared deviations)to measure the effectiveness of forecasting methods would prefer method 1 that results in several smaller forecast errors to method 2 that results in one large forecast error equal to the sum of the absolute values of several small forecast errors given by method 1.

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Quizplus · Accepted Answer

MSD measures the average of the squared differences between actual and forecasted values. Therefore, a forecaster who uses MSD would prefer method 1, which results in smaller forecast errors, as it would result in a lower MSD score compared to method 2 with one large error.

The Forecaster Who Uses MSD (Mean Squared Deviations)to Measure the Effectiveness