A Plot the Following Time Series B Use the Regression Technique to Calculate the Linear Trend

question 70

Essay

a. Plot the following time series. Would the linear or quadratic model fit better? $$\begin{array} { c c c c } \text { Time period } & y _ { t } & \text { Time period } & y _ { t } \\\hline 1 & 5 & 5 & 50 \\2 & 8 & 6 & 85 \\3 & 14 & 7 & 135 \\4 & 25 & 8 & 190\end{array}$$ b. Use the regression technique to calculate the linear trend line and the quadratic trend line.
c. Which line fits better?

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Definitions:

Interest Rate

The percentage of a loan amount charged by the lender to the borrower for the use of money, typically expressed as an annual rate.

Investment Project

A project involving the allocation of funds or resources towards a venture with the expectation of generating income or profit in the future.

Investment Project

A planned set of capital expenditures and activities aimed at generating future benefits or returns.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return.