TABLE 16-4
Given Below Are EXCEL Outputs for Various Estimated $\text { AR (1) Model: }$

question 59

Multiple Choice

TABLE 16-4
Given below are EXCEL outputs for various estimated autoregressive models for Coca-Cola's real operating revenues (in billions of dollars) from 1975 to 1998. From the data, we also know that the real operating revenues for 1996, 1997, and 1998 are 11.7909, 11.7757 and 11.5537, respectively.
$\text { AR (1) Model: }$
$\begin{array}{lcccc}\hline & \text { Coeficients } & \text { Standard Error } & t \text { Stat } & p \text {-value } \\\hline \text { Intercept } & 0.1802077 & 0.39797154 & 0.452815546 & 0.655325119 \\\text { XLag1 } & 1.011222533 & 0.049685158 & 20.35260757 & 2.64373 \mathrm{E}-15\end{array}$


$\text { AR (2) Model: }$
$\begin{array}{lcccc}\hline & \text { Coefficients } & \text { Standard Error } & t \text { Stat } & p \text {-value } \\\hline \text { Intercept } & 0.30047473 & 0.4407641 & 0.681713257 & 0.503646149 \\\text { XLag1 } & 1.17322186 & 0.234737881 & 4.998008229 & 7.98541 \mathrm{E}-05 \\\text { XLag2 } & 0.183028189 & 0.250716669 & -0.730020026 & 0.474283347\end{array}$


$\text { AR (3) Model: }$
$\begin{array}{lrccc}\hline & \text { Coeficients } & \text { Standard Error } & t \text { Stat } & p \text {-value } \\\hline \text { Interept } & 0.313043288 & 0.514437257 & 0.608515972 & 0.550890271 \\\text { XLag1 } & 1.173719587 & 0.246490594 & 4.761721601 & 0.000180926 \\\text { XLag2 } & -0.069378567 & 0.373086508 & -0.185958391 & 0.854678245 \\\text { XLag3 } & -0.122123515 & 0.282031297 & -0.433014053 & 0.670448392\end{array}$



-Referring to Table 16-4, if one decides to use AR(3) , what will the predicted real operating revenue for Coca-Cola be in 2001?

• A) $11.84 billion
• B) $12.47 billion
• C) $11.68 billion
• D) $11.59 billion

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Definitions:

Butanone

A colorless, highly flammable liquid solvent with a sharp minty smell, commonly used in coatings and adhesives.

Hexanone

Hexanone, often referred to as hexone, is an organic compound with a six-carbon chain terminating in a ketone functional group, known for its role in chemical synthesis and industry.

Boiling Points

The temperature at which a substance changes from a liquid to a gas, varying depending on pressure and substance identity.

Ketones

Organic compounds characterized by the presence of a carbonyl group (C=O) bonded to two other carbon atoms, important in many biochemical processes and industrial applications.