SCENARIO 16-9
Given Below Are EXCEL Outputs for Various Estimated

SCENARIO 16-9
Given below are EXCEL outputs for various estimated autoregressive models for a company's
real operating revenues (in billions of dollars) from 1989 to 2012. From the data, you also know
that the real operating revenues for 2010, 2011, and 2012 are 11.7909, 11.7757 and 11.5537,
respectively. First-Order Autoregressive Model:
$\begin{array}{lrrrr}\hline & \text { Coefficients } & \text { Standard Eiror } & {t \text { Stat }} & P \text {-value } \\\hline \text { Intercept } & 0.1802 & 0.3980 & 0.4528 & 0.6553 \\\text { XLag1 } & 1.0112 & 0.0497 & 20.3526 & 0.0000 \\\hline\end{array}$


Second-Order Autoregressive Model:
$\begin{array}{lrrrr}\hline & \text { Coefficients } & \text { Standard Error } &{t \text { Stat }} & P \text {-value } \\\hline \text { Intercept } & 0.3005 & 0.4408 & 0.6817 & 0.5036 \\\text { X Lag 1 } & 1.1732 & 0.2347 & 4.9980 & 0.0001 \\\text { X Lag 2 } & -0.1830 & 0.2507 & -0.7300 & 0.4743 \\\hline\end{array}$


Third-Order Autoregressive Model:
$\begin{array}{lrrrr} & \text { Coefficients } & \text { Standard Error } & t \text { Stat } & \text { P-value } \\\hline \text { Intercept } & 0.3130 & 0.5144 & 0.6085 & 0.5509 \\\text { XLag1 } & 1.1737 & 0.2465 & 4.7617 & 0.0002 \\\text { XLag2 } & -0.0694 & 0.3731 & -0.1860 & 0.8547 \\\text { XLag3 } & -0.1221 & 0.2820 & -0.4330 & 0.6704\end{array}$
-Referring to Scenario 16-9, if one decides to use the Third-Order Autoregressive model , what will the predicted real operating revenue for the company be in 2014?

A) $11.55 billion
B) $11.62 billion
C) $12.47 billion
D) $12.57 billion