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:
Where
is the coded quarterly value with in the first quarter of 2005 .
is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise.
is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise.
is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise.
-Referring to Instruction 14-6,to obtain a forecast for the third quarter of 2010 using the model,which of the following sets of values should be used in the regression equation?
A) X = 22, Q1 = 0, Q2 = 0, Q3 = 1
B) X = 23, Q1 = 0, Q2 = 0, Q3 = 0
C) X = 23, Q1 = 0, Q2 = 0, Q3 = 1
D) X = 22, Q1 = 0, Q2 = 0, Q3 = 0
Correct Answer:
Verified
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