If we want to measure the seasonal variations on stock market performance by quarter,we would need:
A)4 indicator variables
B)3 indicator variables
C)2 indicator variables
D)1 indicator variable

Question

Quizplus · Accepted Answer

To measure seasonal variations by quarter, we need 3 indicator variables. This is because with 4 quarters, one quarter can serve as the baseline, and the other 3 quarters are compared against this baseline, thus requiring only 3 indicators to capture the seasonal effects.

If We Want to Measure the Seasonal Variations on Stock