A Consulting Firm Estimates the Following Quarterly Sales Forecasting Model $Q _ { t } = a + b t + c D$

question 41

Multiple Choice

A consulting firm estimates the following quarterly sales forecasting model: $Q _ { t } = a + b t + c D$ The equation is estimated using quarterly data from 20010I-2020III (t = 1,...,43) .The variable D is a dummy variable for the second quarter where: D = 1 in the second quarter,and 0 otherwise.
The results of the estimation are: Given the above,what is the estimated intercept of the trend line in the second quarter?

• A)22.50
• B)24.50
• C)24.36
• D)2.00
• E)none of the above

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Definitions:

Marginal Tax Rate

The amount of tax paid on an additional dollar of income.

Bond Yield

The return an investor realizes on a bond, calculated by dividing the annual interest payments by the current market price of the bond.

Equally Weighted Index

An equally weighted index is a stock market index in which each constituent stock contributes equally to the index's value, regardless of the company's market capitalization.

Value-Weighted Index

A stock market index in which each component is weighted in proportion to its market value.