The Manufacturer of Beanie Baby Dolls Used Quarterly Price Data $P _ { t } = a + b t + c _ { 1 } D 1 _ { t } + c _ { 2 } D 2 _ { t } + c _ { 3 } D 3 _ { t }$

question 20

Multiple Choice

The manufacturer of Beanie Baby dolls used quarterly price data for 2012I - 2020IV (t = 1,...,36) and the regression equation $P _ { t } = a + b t + c _ { 1 } D 1 _ { t } + c _ { 2 } D 2 _ { t } + c _ { 3 } D 3 _ { t }$ to forecast doll prices in the year 2021. $P _ { t }$ is the quarterly price of dolls,and $D 1 _ { t } , D 2 _ { t }$ and $D 3 _ { t }$ are dummy variables for quarters I,II,and III,respectively. What is the estimated intercept of the trend line in the 4th quarter?

• A)22.8
• B)16
• C)18
• D)20
• E)none of the above

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Definitions:

Intrinsic Value

The actual, fundamental worth of an asset or investment, determined through financial analysis independent of current market value.

Time Value

The concept that money available now is worth more than an identical sum in the future due to its potential earning capacity.

Strike Price

The predetermined price at which the holder of an option can buy (call) or sell (put) the underlying asset.

Market Price

The current price at which an asset or service can be bought or sold.