TABLE 16-9
Given below are Excel outputs for various estimated autoregressive 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.
First-Order Autoregressive Model:

Second-Order Autoregressive Model:

Third-Order Autoregressive Model:

-Referring to Table 16-9 and using a 5% level of significance, what is the appropriate autoregressive model for the company's real operating revenue?
A) First-Order Autoregressive Model
B) Second-Order Autoregressive
C) Third-Order Autoregressive
D) Any of the above

Question

TABLE 16-9
Given below are Excel outputs for various estimated autoregressive 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.
First-Order Autoregressive Model:
  
Second-Order Autoregressive Model:
  
Third-Order Autoregressive Model:
 
-Referring to Table 16-9 and using a 5% level of significance, what is the appropriate autoregressive model for the company's real operating revenue?
A) First-Order Autoregressive Model 
B) Second-Order Autoregressive 
C) Third-Order Autoregressive 
D) Any of the above

Quizplus · Accepted Answer

The first-order autoregressive model is the appropriate model because the p-value for the first-order term is less than 0.05, indicating that the first-order term is statistically significant.

TABLE 16-9 Given Below Are Excel Outputs for Various Estimated Autoregressive Models