Share
Explore BrainMass

Business Forecasting

I need assistance with writing a memo SUMMARIZING the calculated findings to the attached excel problem.

Apex Mutual fund invests primarily in technology stocks. The price of the fund at the end
of each month for the 12 months of 2000 are:

Month Mutual Fund Price Forecasted MAD MSE MPE MAPE
January $19.39 $19.00 0.39 0.1521 2.053% 2.0526%
February $18.96 $19.39 0.43 0.1849 -2.218% 2.2176%
March $18.20 $18.96 0.76 0.5776 -4.008% 4.0084%
April $17.89 $18.20 0.31 0.0961 -1.703% 1.7033%
May $18.43 $17.89 0.54 0.2916 3.018% 3.0184%
June $19.98 $18.43 1.55 2.4025 8.410% 8.4102%
July $19.51 $19.98 0.47 0.2209 -2.352% 2.3524%
August $20.63 $19.51 1.12 1.2544 5.741% 5.7406%
September $19.78 $20.63 0.85 0.7225 -4.120% 4.1202%
October $21.25 $19.78 1.47 2.1609 7.432% 7.4317%
November $21.18 $21.25 0.07 0.0049 -0.329% 0.3294%
December $22.14 $21.18 0.96 0.9216 4.533% 4.5326%
Jan-01 $22.14
Total 8.92 8.99 16.455% 45.918%

Note : MAD =sum of ABSOLUTE of (Actual - forecast) / total no of periods

0.743333333

MSE = Sum of MAD*MAD / total no of periods

0.749166667

MPE = (Actual - Forecast)/ Forecast

MAPE = ABS ( MPE)

Attachments

Solution Preview

Please refer to the EXCEL for calculation.
<br>
<br>The Mean Absolute Deviation (MAD) corrects for this "canceling out" problem by averaging the absolute value of the errors. Thus the MAD represents the average magnitude of the errors without regard to whether the errors represented under-forecasts or over-forecasts.
<br>In this forecasting model, MAD indicates that each forecast deviated by an average of $0.7433 in price, which doesn't seem to be high when the mutual fund price is around $20.
<br>
<br>The Mean Squared Error (MSE) is obtained by averaging the squares of the ...

Solution Summary

Apex Mutual fund invests primarily in technology stocks. The price of the fund at the end
of each month for the 12 months of 2000 are:

Month Mutual Fund Price Forecasted MAD MSE MPE MAPE
January $19.39 $19.00 0.39 0.1521 2.053% 2.0526%
February $18.96 $19.39 0.43 0.1849 -2.218% 2.2176%
March $18.20 $18.96 0.76 0.5776 -4.008% 4.0084%
April $17.89 $18.20 0.31 0.0961 -1.703% 1.7033%
May $18.43 $17.89 0.54 0.2916 3.018% 3.0184%
June $19.98 $18.43 1.55 2.4025 8.410% 8.4102%
July $19.51 $19.98 0.47 0.2209 -2.352% 2.3524%
August $20.63 $19.51 1.12 1.2544 5.741% 5.7406%
September $19.78 $20.63 0.85 0.7225 -4.120% 4.1202%
October $21.25 $19.78 1.47 2.1609 7.432% 7.4317%
November $21.18 $21.25 0.07 0.0049 -0.329% 0.3294%
December $22.14 $21.18 0.96 0.9216 4.533% 4.5326%
Jan-01 $22.14
Total 8.92 8.99 16.455% 45.918%

Note : MAD =sum of ABSOLUTE of (Actual - forecast) / total no of periods

0.743333333

MSE = Sum of MAD*MAD / total no of periods

0.749166667

MPE = (Actual - Forecast)/ Forecast

MAPE = ABS ( MPE)

$2.19