When using regression to combine forecast of the same Y variable derived in with

Question

When using regression to combine forecast of the same Y variable derived in with various methods. How do you determine the best forecasts to include in the model?

a) forecast that are highly correlated are best to combine with regression

b) forecasts that are not highly correlated are best to combine with regression

c) forecasts that are most accurate are best to combine with regression

d) qualitative forecasts of Y should be excluded from the regression to yield a better combine result

e) the model that is best has the most significant constant term

Explanation / Answer

The correct answer should ideally be B. The forecasts should not be highly correlated for the results to be best. The correct answer is thus B

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