TABLE 16-13 A Local Store Developed a Multiplicative Time-Series Model to Forecast

question 6

Multiple Choice

TABLE 16-13
A local store developed a multiplicative time-series model to forecast its revenues in future quarters, using quarterly data on its revenues during the 4-year period from 1998 to 2002. The following is the resulting regression equation:
log₁₀Y^{^} = 6.102 + 0.012 X - 0.129 Q₁ - 0.054 Q₂ + 0.098 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 1998.
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 16-13, the best interpretation of the coefficient of X (0.012) in the regression equation is

• A) the annual growth rate in revenues is around 2.8%.
• B) the annual growth rate in revenues is around 1.2%.
• C) the quarterly compound growth rate in revenues is around 2.8%.
• D) the quarterly growth rate in revenues is around 1.2%.

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Definitions:

American Victory

A term that could refer to any significant success or triumph by the United States in various contexts, such as wars, sports, or international competitions.

Trenton

The capital city of New Jersey, notable for its pivotal role in the American Revolutionary War during the Battle of Trenton.

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relates to France or its people, language, or culture, a country known for its historical influence on art, science, and philosophy.

Intolerable Acts

A series of punitive laws passed by the British Parliament in 1774 meant to punish the Massachusetts colonists for the Boston Tea Party.