The estimated regression equation is y_t = 448 + 12t + 18 Qtr1 - 26 Qtr2 + 3 Qtr3.The regression model has three quarterly binaries.The model was fitted to 12 periods of quarterly data starting with the first quarter).Why is there no fourth quarterly binary for Qtr4? A) Because the researcher made a mistake (we need binaries for all four quarters) B) Because it is unnecessary (its value is implied by the other three binaries) C) Because the fourth quarter binary is assumed to be the same as the first quarter D) Because there is no seasonality in the fourth quarter in most time series

Question

Quizplus · Accepted Answer

The regression model already includes three quarterly binaries, which can capture seasonality for all four quarters. Including a fourth binary for Qtr4 would be redundant and unnecessary, as its value can be implied by the other three binaries. Therefore, there is no need for a fourth binary.

The Estimated Regression Equation Is Yt = 448 + 12t

The Estimated Regression Equation Is Y_t = 448 + 12t