A Time Series Regression Equation for a Surfboard Manufacturing Company

question 142

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 regarding the coefficient of Q₄?

• A) This company expects to sell 8 more surfboards in the December quarter than in the March quarter or the September quarter.
• B) This company expects to sell 8 more surfboards in the December quarter than in the June quarter.
• C) This company expects to sell 8 more surfboards in the June quarter than in the December quarter.
• D) None of these choices are correct.

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Definitions:

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