Estimate the total uncertainty in prediction by accounting


Problem

A biased prediction model accounts for only the aleatory uncertainty and has a bias ratio of 0.95, that is, underprediction, and a COV of 0.1 in its prediction. An analyst believes that the parameters of this model are uncertain, and characterizes this uncertainty to be of the epistemic type as a multiplier with a mean value of 1.05 and a COV of 0.2. Estimate the total uncertainty in prediction by accounting for both the aleatory and epistemic uncertainties assuming normal probability distributions. Briefly discuss your results.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Microeconomics: Estimate the total uncertainty in prediction by accounting
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