Instruction 14-16
Given Below Are Microsoft Excel Outputs for Various

Instruction 14-16
Given below are Microsoft Excel outputs for various estimated autoregressive (AR) models for a company’s real operating revenues (in billions of dollars) from 1985 to 2008. From the data, you also know that the real operating revenues for 2006, 2007 and 2008 are 11.7909, 11.7757 and 11.5537, respectively.
AR (1) Model:
$\begin{array}{|l|l|l|l|l|}\hline & \text { Coefficients } & \text { Standard Error } & \text { t Stat } & p \text {-value } \\\hline \text { Intercept } & 0.1802 & 0.3980 & 0.4528 & 0.6553 \\\hline \text { XLag1 } & 1.0112 & 0.0497 & 20.3526 & 0.0000 \\\hline\end{array}$

AR (2) Model:
$\begin{array}{|l|l|l|l|l|}\hline & \text { Coefficients } & \text { Standard Error } & \text { t Stat } & p \text {-value } \\\hline \text { Intercept } & 0.3005 & 0.4408 & 0.6817 & 0.5036 \\\hline \text { X Lag 1 } & 1.1732 & 0.2347 & 4.9980 & 0.0001 \\\hline \text { X Lag 2 } & -0.1830 & 0.2507 & -0.7300 & 0.4743 \\\hline\end{array}$

AR (3) Model:
$\begin{array}{|l|l|l|l|l|}\hline & \text { Coefficients } & \text { Standard Error } & \text { t Stat } & p \text {-value } \\\hline \text { Intercept } & 0.3130 & 0.5144 & 0.6085 & 0.5509 \\\hline \text { XLag1 } & 1.1737 & 0.2465 & 4.7617 & 0.0002 \\\hline \text { XLag2 } & -0.0694 & 0.3731 & -0.1860 & 0.8547 \\\hline \text { XLag3 } & -0.1221 & 0.2820 & -0.4330 & 0.6704 \\\hline\end{array}$

-Referring to Instruction 14-16 and using a 5% level of significance,what is the appropriate AR model for the company's real operating revenue?

A) AR(1)
B) AR(2)
C) AR(3)
D) Any of the above