Assume the following information:
$\begin{array}{ccc}
\text { Period } & \begin{array}{c}
\text { Predicted Value of } \
\text { New Zealand Dollar }
\end{array} & \begin{array}{c}
\text { Realized Value of } \
\text { New Zealand Dollar }
\end{array} \
1 & \$ .52 & \$ .50 \
2 & .54 & .60 \
3 & .44 & .40 \
4 & .51 & .50
\end{array}$

Given this information, the mean absolute forecast error as a percentage of the realized value is about:
A) 1.5%.
B) 26%.
C) 6%.
D) 6.5%.
E) none of the above

Question

Assume the following information:
$\begin{array}{ccc}
\text { Period } & \begin{array}{c}
\text { Predicted Value of } \
\text { New Zealand Dollar }
\end{array} & \begin{array}{c}
\text { Realized Value of } \
\text { New Zealand Dollar }
\end{array} \
1 & \$ .52 & \$ .50 \
2 & .54 & .60 \
3 & .44 & .40 \
4 & .51 & .50
\end{array}$

Given this information, the mean absolute forecast error as a percentage of the realized value is about:
A) 1.5%.
B) 26%.
C) 6%.
D) 6.5%.
E) none of the above

Quizplus · Accepted Answer

The mean absolute forecast error is the average of the absolute differences between the predicted and realized values. In this case, the absolute differences are:Period 1: |0.52 - 0.50| = 0.02Period 2: |0.54 - 0.60| = 0.06Period 3: |0.44 - 0.40| = 0.04Period 4: |0.51 - 0.50| = 0.01The mean absolute forecast error is the average of these differences, which is (0.02 + 0.06 + 0.04 + 0.01) / 4 = 0.0325.The mean absolute forecast error as a percentage of the realized value is 0.0325 / 0.50 * 100 = 6.5%.

Assume the Following Information Given This Information, the Mean Absolute Forecast Error as a