One measure of the accuracy of a forecasting model is ______.
A) the smoothing constant
B) a deseasonalized time series
C) the mean squared error
D) None of the answers is correct.

Question

Quizplus · Accepted Answer

The mean squared error (MSE) measures the average of the squares of the errors or deviations, which are the differences between the actual and predicted values. A lower MSE indicates a better fit between the forecast and actual values, thus a higher level of accuracy for the forecasting model. Therefore, C is the best choice as it directly measures the accuracy of the forecasting model.

One Measure of the Accuracy of a Forecasting Model Is