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

question 99

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 constant 6.102 in the regression equation is

• A) the fitted value for the first quarter of 1998, after to seasonal adjustment, is 10^6.102.
• B) the fitted value for the first quarter of 1998, prior to seasonal adjustment, is log₁₀(6.102).
• C) the fitted value for the first quarter of 1998, prior to seasonal adjustment, is 10^6.102.
• D) the fitted value for the first quarter of 1998, after to seasonal adjustment, is log₁₀(6.102).

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