The following is the list of MAD statistics for each of the models you have estimated from time-series data: $$\begin{array} { | l | c | }
\hline \text { Model } & \text { MAD } \
\hline \text { Linear Trend } & 1.38 \
\hline \text { Quadratic Trend } & 1.22 \
\hline \text { Exponential Trend } & 1.39 \
\hline \text { AR(2) } & 0.71 \
\hline
\end{array}$$ Based on the MAD criterion,the most appropriate model is
A)linear trend.
B)AR(2).
C)quadratic trend.
D)exponential trend.

Question

The following is the list of MAD statistics for each of the models you have estimated from time-series data: $$\begin{array} { | l | c | } 
\hline \text { Model } & \text { MAD } \
\hline \text { Linear Trend } & 1.38 \
\hline \text { Quadratic Trend } & 1.22 \
\hline \text { Exponential Trend } & 1.39 \
\hline \text { AR(2) } & 0.71 \
\hline
\end{array}$$ Based on the MAD criterion,the most appropriate model is
A)linear trend.
B)AR(2).
C)quadratic trend.
D)exponential trend.

Quizplus · Accepted Answer

MAD (mean absolute deviation) is a measure of forecast accuracy. The lower the MAD value, the better the forecast quality. Among the given choices, model AR(2) has the lowest MAD value, indicating it is the most appropriate model for the given time-series data. Therefore, the best choice is B - AR(2).

The Following Is the List of MAD Statistics for Each