Question: 4. An analyst ran three models as following with the respective training and validation periods error values: 1. Linear Trend; Training Period RMSE = 1246.43,

4.

An analyst ran three models as following with the respective training and validation periods error values:

1. Linear Trend; Training Period RMSE = 1246.43, Validation Period RMSE = 2130.43

2. Exponential Trend + Seasonality: Training Period RMSE = 643.44, Validation Period RMSE = 690.88

3. Polynomial Trend + Seasonality: Training Period RMSE = 689.09, Validation Period RMSE = 603.78

Based on the above information, please select the right statement below:

a.

Exponential Trend + Seasonality model can forecast future values better than others

b.

Polynomial Trend + Seasonality model can forecast future values better than others

c.

Linear model can forecast future values better than others

d.

None of the above statements are correct.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!