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

question 104

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, the best interpretation of the coefficient of X (0.117) in the regression equation is

• A) the annually compound growth rate in contracts is around 11.7%.
• B) the quarterly compound growth rate in contracts is around 11.7%.
• C) the annually compound growth rate in contracts is around 30.92%.
• D) the quarterly compound growth rate in contracts is around 30.92%.

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