Solved

Instruction 14-6
a Local Store Developed a Multiplicative Time-Series Model log10Y^=6.102+0.012X0.129Q10.054Q2+0.098Q3\log _ { 10 } \hat { Y } = 6.102 + 0.012 X - 0.129 Q _ { 1 } - 0.054 Q _ { 2 } + 0.098 Q _ { 3 }

Question 84

Multiple Choice

Instruction 14-6
A local store developed a multiplicative time-series model to forecast its revenues in future quarters, using quarterly data on its revenues during the four-year period from 2005 to 2009. The following is the resulting regression equation:
log10Y^=6.102+0.012X0.129Q10.054Q2+0.098Q3\log _ { 10 } \hat { Y } = 6.102 + 0.012 X - 0.129 Q _ { 1 } - 0.054 Q _ { 2 } + 0.098 Q _ { 3 }
Where
XX is the coded quarterly value with X=0X = 0 in the first quarter of 2005 .
Q1Q _ { 1 } is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise.
Q2Q _ { 2 } is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise.
Q3Q _ { 3 } is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise.
-Referring to Instruction 14-6,the best interpretation of the coefficient of Q3 (0.098) in the regression equation is:


A) The revenues in the third quarter of a year is approximately 25.31% higher than the average over all four quarters.
B) The revenues in the third quarter of a year is approximately 25.31% higher than it would be during the fourth quarter.
C) The revenues in the third quarter of a year is approximately 9.8% higher than the average over all 4 quarters.
D) The revenues in the third quarter of a year is approximately 9.8% higher than it would be during the fourth quarter.

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