The Trend Equation for Annual Sales Data (In Millions of Dollars)

question 4

Multiple Choice

The trend equation for annual sales data (in millions of dollars) is $=65+2.5 t$ , where t = 1 for 2000. The monthly seasonal index for December is 0.97. The forecast sales for December of 2009 is:

• A) 90.0.
• B) 7.28.
• C) 7.50.
• D) 7.69.

---

Definitions:

Risk Premiums

The extra return expected by investors for taking on additional risk compared to a risk-free asset.

Systematic Risk

A risk associated with the entire market or a segment of it, which cannot be lessened by diversifying holdings.

Risk-Free Rate

The theoretical rate of return on an investment with zero risk, often represented by the yield of government bonds.

Stock Index

A statistic that reflects the composite value of a selected group of stocks, representing their aggregate performance.