SCENARIO 16-13 Given Below Is the Monthly Time Series Data for U.S.retail

question 49

True/False

SCENARIO 16-13
Given below is the monthly time series data for U.S.retail sales of building materials over a specific year.
The results of the linear trend,quadratic trend,exponential trend,first-order autoregressive,second-order autoregressive and third-order autoregressive model are presented below in which the coded month for the 1^st month is 0:
Linear trend model:

Quadratic trend model:
Third-order autoregressive::

Below is the residual plot of the various models:

-Referring to Scenario 16-13,you can conclude that the quadratic term in the quadratic-trend model is statistically significant at the 5% level of significance.

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Definitions:

Debt Financing

A method of raising capital through the sale of bonds, bills, or notes to individual and/or institutional investors, in return for lending the company money.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed versus variable costs a company has.

ROCE

Return on Capital Employed (ROCE) is a financial ratio that measures a company's profitability in terms of the capital it uses.

ROE

Return on Equity; a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how much profit a company generates with the money shareholders have invested.