1. You have forecast the sales for your company for the next 12 months using mon

Question

1. You have forecast the sales for your company for the next 12 months using monthly revenue data. The forecast model you used produced the time series residuals shown below. Are these residuals considered random?

Residuals

-892

-349

-387

-489

-62

-24

34

28

198

490

578

498

Question 28 options:

a)

b)

c)

d)

No, since the residuals indicate a positive slope or trend.

2 What is the RMSE for the residuals in the previous problem?

Question 29 options:

a)

b)

c)

d)

d)

a)

Yes, since teh residuals randomly vary in magnitude.

b)

Yes, since the residual are psositive and negative an vary in magnitude.

c)

No, since the residual are stationary and vary in magnitude.

d)

No, since the residuals indicate a positive slope or trend.

2 What is the RMSE for the residuals in the previous problem?

Question 29 options:

a)

54.8

b)

453.2

c)

425.6

d)

783.2

d)

45.4

Explanation / Answer

1. Yes, these residuals are considered random because the residuals are positive and negative and vary in magnitude.

2. 54.8 is the RMSE for the residuals in the previous problem. So the correct option is A.

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