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If the RSFE or MFE is negative, then on average the forecasts are too _____.

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User Saeedj
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1 Answer

1 vote

Final answer:

A negative RSFE or MFE indicates that the forecasts are generally too low. Forecast adjustments and adequate sample sizes are essential for accurate forecasting and fitting data to a normal curve.

Step-by-step explanation:

If the RSFE (Relative Standard Forecast Error) or MFE (Mean Forecast Error) is negative, then on average the forecasts are too low. This suggests that the actual values are higher than what was forecasted. To improve accuracy, forecast adjustments may be needed. It's especially critical to ensure that the sample size is sufficient for the forecasts to fit an expected distribution, such as the normal curve. A smaller sample size could lead to a less accurate approximation and less reliable forecasts.

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User Forqed
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