TABLE 16-5 a Contractor Developed a Multiplicative Time-Series Model to Forecast the to Forecast

question 61

Multiple Choice

TABLE 16-5
A contractor developed a multiplicative time-series model to forecast the number of contracts in future quarters, using quarterly data on number of contracts during the 3-year period from 1996 to 1998. The following is the resulting regression equation:
ln Y^{^} = 3.37 + 0.117 X - 0.083 Q₁ + 1.28 Q₂ + 0.617 Q₃
where
Y^{^} is the estimated number of contracts in a quarter
X is the coded quarterly value with X = 0 in the first quarter of 1996.
Q₁ is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise.
Q₂ is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise.
Q₃ is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise.
-Referring to Table 16-5, in testing the coefficient for Q₁ in the regression equation (- 0.083) , the results were a t-statistic of - 0.66 and an associated p-value of 0.530. Which of the following is the best interpretation of this result?

• A) The number of contracts in the first quarter of the year is not significantly different than the number of contracts in an average quarter (? = 0.05).
• B) The number of contracts in the first quarter of the year is not significantly different than the number of contracts in the fourth quarter for a given coded quarterly value of X (? = 0.05).
• C) The number of contracts in the first quarter of the year is significantly different than the number of contracts in an average quarter (? = 0.05).
• D) The number of contracts in the first quarter of the year is significantly different than the number of contracts in the fourth quarter for a given coded quarterly value of X (? = 0.05).