Question

Which measure of error allows us to estimate the standard deviation and thereby draw a confidence interval around our forecast error (and thus the forecast itself)?

A. Root MSE (RMSE)

B. Mean absolute percentage error (MAPE)

C. Mean forecast error (avg. error)

D. Cumulative forecast error (CFE)

Answer 1

Q.) Which measure of error allows us to estimate the standard deviation and thereby draw a confidence interval around our forecast error (and thus the forecast itself)?

A) Root MSE (RMSE).

Root mean square error or RMSE is the standard deviation of the prediction errors. It measures how far the data points are from the line. It is also known as the standard error. On the other hand, cumulative forecast error is considered as the sum of the forecasting errors.

Hope this helps :)