Long-term forecasts are usually less accurate than short-term forecasts because
A)short-term forecasts have a larger standard deviation of error relative to the mean than long-term forecasts.
B)short-term forecasts have more standard deviation of error relative to the mean than long-term forecasts.
C)long-term forecasts have a smaller standard deviation of error relative to the mean than short-term forecasts.
D)long-term forecasts have a larger standard deviation of error relative to the mean than short-term forecasts.

Question

Quizplus · Accepted Answer

Long-term forecasts are subject to more uncertainty because there are more variables that can affect the forecast outcome over a longer period of time. This results in a larger standard deviation of error relative to the mean than short-term forecasts, making them less accurate. Short-term forecasts have less time for unforeseen events to affect the outcome and therefore have a smaller standard deviation of error.

Long-Term Forecasts Are Usually Less Accurate Than Short-Term Forecasts Because