Exhibit 18.7.The following table shows the annual revenues (in millions of dollars)of a pharmaceutical company over the period 1990-2011. The autoregressive models of order 1 and 2, and ,were applied on the time series to make revenue forecasts.The relevant parts of Excel regression outputs are given below.
Model AR(1): Model AR(2): Refer to Exhibit 18.7.Using the AR(1)model,find the company revenue forecast for 2012.

Question

Exhibit 18.7.The following table shows the annual revenues (in millions of dollars)of a pharmaceutical company over the period 1990-2011.  The autoregressive models of order 1 and 2,  and  ,were applied on the time series to make revenue forecasts.The relevant parts of Excel regression outputs are given below.
Model AR(1):  Model AR(2):  Refer to Exhibit 18.7.Using the AR(1)model,find the company revenue forecast for 2012.

Quizplus · Accepted Answer

The Answer of Exhibit 18.7.The following table shows the annual revenues (in millions of dollars)of a pharmaceutical company over the period 1990-2011.  The autoregressive models of order 1 and 2,  and  ,were applied on the time series to make revenue forecasts.The relevant parts of Excel regression outputs are given below.
Model AR(1):  Model AR(2):  Refer to Exhibit 18.7.Using the AR(1)model,find the company revenue forecast for 2012.