Instruction 14-5
A local store developed a multiplicative time-series model to forecast its revenues in future quarters,using quarterly data on its revenues during the 4-year period from 2005 to 2009.The following is the resulting regression equation:
log 10 = 6.102 + 0.012 X - 0.129 Q1 - 0.054 Q2 + 0.098 Q3
Where
is the estimated number of contracts in a quarter
X is the coded quarterly value with X = 0 in the first quarter of 2005.
Q1 is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise.
Q2 is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise.
Q3 is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise.
-Referring to Instruction 14-5,the best interpretation of the constant 6.102 in the regression equation is
A) the fitted value for the first quarter of 2005,after seasonal adjustment,is log10(6.102) .
B) the fitted value for the first quarter of 2005,after seasonal adjustment,is 106.102.
C) the fitted value for the first quarter of 2005,prior to seasonal adjustment,is log10(6.102) .
D) the fitted value for the first quarter of 2005,prior to seasonal adjustment,is 106.102.
Correct Answer:
Verified
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