# Naive Forecasting

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Naive Forecasting

Complete the table, then determine the MAD and MSE. What is your forecast for Week 13?

(Some of the values have been filled in for you to help with your calculations.)

McCray Enterprise: Weekly closing price per share

Week Price Forecast Residuals ABS SQUARED

t yt Ft yt - Ft lyt - Ft l (yt - Ft )2

1 80.00 No Forecast

2 80.50 80.00 0.5 0.5 0.25

3 81.00

4 80.25 81.00 -.75 0.75 .5625

5 81.50

6 82.00

7 80.50 82.00 -1.5 1.5 2.25

8 81.00

9 82.50

10 83.00

11 80.50

12 81.00

lyt - Ft l (yt - Ft )2

1.) Mean Absolute Deviation = lyt- Ftl

11

2) Mean Squared Error = (yt - Ft)2

11

3) Forecast for Week 13 =

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##### Solution Summary

The expert examines Naive forecasting. The table is complete and MAD and MSE are used.

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