Which of the following is not a drawback of forecasting using the compound growth rate method?
A)only considers first and last observations
B)considers only equal absolute changes
C)disregards fluctuations between the original and terminal observations
D)does not consider any trends in the data

Question

Quizplus · Accepted Answer

The compound growth rate method does not assume equal absolute changes; instead, it calculates the average rate at which something grows over a period, considering the compounding effect. This method actually considers the overall growth from the first to the last observation, effectively compounding the growth across periods, which contradicts the notion of assuming equal absolute changes.

Which of the Following Is Not a Drawback of Forecasting