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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?  Time period yt Time period yt155502868531471354258190\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?


Definitions:

Profit

The financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Risk-free Rate

The theoretical return on investment with no risk of financial loss, often represented by the yield on government securities.

Exchange Rate

The price of one country's currency in terms of another, essential for currency exchange and international trade.

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