Consider the following to answer the question(s) below:
A third-order autoregressive model, AR (3) was fit to monthly closing stock prices, adjusted for dividends, of Boeing Corporation from January 2006 through August 2008 (closing price on the first trading day of the month). The results are as follows:

-Assume that the year 2000 is used as the index base period and that sales were $12 million in the year 2000. If sales were $18 million in the year 2006, the simple index number for the year 2006 is
A) 150.0.
B) 15.0.
C) 0.667.
D) 6 million.
E) 66.67.

Question

Consider the following to answer the question(s) below:
A third-order autoregressive model, AR (3) was fit to monthly closing stock prices, adjusted for dividends, of Boeing Corporation from January 2006 through August 2008 (closing price on the first trading day of the month). The results are as follows:

-Assume that the year 2000 is used as the index base period and that sales were $12 million in the year 2000. If sales were $18 million in the year 2006, the simple index number for the year 2006 is
A) 150.0. 
B) 15.0. 
C) 0.667. 
D) 6 million. 
E) 66.67.

Quizplus · Accepted Answer

The simple index number is calculated by taking the value in the year of interest (2006) and dividing it by the value in the base year (2000), then multiplying by 100. So, for 2006, it would be ($18 million / $12 million) * 100 = 150.0.

Consider the Following to Answer the Question(s) Below