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:

Domestic Price

The price at which goods or services are sold within a country's own market, excluding any tariffs, duties, or international shipping costs.

Free Trade

The free trade of goods and services across nations without the application of restrictions like tariffs, duties, and quotas.

Tariff Revenue

The income that a government earns from imposing tariffs, which are taxes on imports or exports.

Domestic Price

The charge for goods or services inside a nation's boundaries, differing from prices found in the global or foreign marketplace.