A Time Series Regression Equation for a Surfboard Manufacturing Company

question 18

Multiple Choice

A time series regression equation for a surfboard manufacturing company in Australia is given below: Y = 35 + 4Q₁ + 0.5Q₃ + 8Q₄ + 3t
With t in quarters and the origin is December 2010 and Q₁ is the indicator variable for March, Q₃ is the indicator variable for September and Q₄ is the indicator variable for December.
Which of the following statements is correct?

• A) The overall general movement of number of surfboards sold by this company is positive because the coefficients of the indicator variables are positive.
• B) The overall general movement of number of surfboards sold by this company is positive because the intercept is positive.
• C) The overall general movement of number of surfboards sold by this company is positive because the coefficient of time t is positive.
• D) None of these choices are correct.

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