Exhibit 18-2
Consider the following time series.
-Refer to Exhibit 18-2. The slope of linear trend equation, b₁, is

Question

Exhibit 18-2 Consider the following time series. -Refer to Exhibit 18-2. The slope of linear trend equation, b₁, is A)2.5 B)2.0 C)1.0 D)1.25

Quizplus · Accepted Answer

To calculate the slope of the linear trend equation, we first need to calculate the difference between each two consecutive values in the time series, which is shown in the table below:

| Time | Value | Difference |
|------|-------|------------|
| 1    | 10    |            |
| 2    | 12.5  | 2.5        |
| 3    | 15    | 2.5        |
| 4    | 17.5  | 2.5        |
| 5    | 20    | 2.5        |

Then, we need to calculate the average of the differences, which is (2.5+2.5+2.5+2.5)/4 = 2.5/4 = 0.625. Therefore, the slope of the linear trend equation is 0.625*4 = 2.5.

So the answer is B) 2.0.

Exhibit 18-2 Consider the Following Time Series