Graph 8.1
Data plotted in the graph appear in the table below.

-If forecast errors are normally distributed with a mean of 0, the relationship between σ and MAD is:
A) 1.25MAD ≈ σ
B) MAD ≈ 1.25σ
C) MAD ≈ 0.5σ
D) 0.8MAD ≈ σ

Question

Graph 8.1
Data plotted in the graph appear in the table below.

-If forecast errors are normally distributed with a mean of 0, the relationship between σ and MAD is:
A) 1.25MAD ≈ σ 
B) MAD ≈ 1.25σ 
C) MAD ≈ 0.5σ 
D) 0.8MAD ≈ σ

Quizplus · Accepted Answer

When forecast errors are normally distributed with a mean of 0, the standard deviation (σ) is approximately equal to 1.25 times the Mean Absolute Deviation (MAD). This relationship is derived from the properties of the normal distribution.

Graph 8.1 Data Plotted in the Graph Appear in the Table Below