1.What does the estimated variance (or standard error) of the forecast error tell us about our prediction ?

A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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1.What does the estimated variance (or
standard error) of the forecast error tell us
about our prediction ?
2.How does each of the followings affect the
size of the standard errors of the forecast
error. Give a brief intuition (i.e., give an easy-
to-understand explanation in words without
the need of mathematical formula/proof).
(i) Smaller variance of the error term
(ii) Larger value of (BO – B)^ 2
Transcribed Image Text:1.What does the estimated variance (or standard error) of the forecast error tell us about our prediction ? 2.How does each of the followings affect the size of the standard errors of the forecast error. Give a brief intuition (i.e., give an easy- to-understand explanation in words without the need of mathematical formula/proof). (i) Smaller variance of the error term (ii) Larger value of (BO – B)^ 2
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