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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Definitions:

Grand Mean

The mean of means, calculated by taking the average of several group means.

Completely Randomized

A design in experiments where all subjects have an equal chance of being assigned to any group or treatment.

Factorial Design

An experimental strategy used to test the effect of two or more variables across multiple levels simultaneously.

Statistical Conclusions

Inferences or deductions made from statistical tests about the data or population parameters.