Asked by Tobby Oniga on Apr 27, 2024
Verified
The mean absolute deviation averages the absolute differences between the actual values of the time series at time t and the forecast values at time:
A) t + 1
B) t
C) t− 1
D) t− 2
Actual Values
The observed or measured values in a dataset, as opposed to predicted or estimated values.
Mean Absolute Deviation
A measure of variability that calculates the average distance between each data point and the mean of the data set.
Forecast Values
The projected or predicted numerical values in the future based on current and historical data analysis.
- Understand the theoretical and practical features of diverse forecast accuracy measures.
Verified Answer
WZ
Willian ZhangApr 27, 2024
Final Answer :
B
Explanation :
The mean absolute deviation (MAD) measures the average difference between the actual values and the forecast values. It is calculated as the average of the absolute differences between the actual and forecast values at each time point. Therefore, the time t is the reference point for the forecast, and the actual values are compared to the forecast values at that time point (t). Hence, the best choice is B, which corresponds to time t.
Learning Objectives
- Understand the theoretical and practical features of diverse forecast accuracy measures.
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