A Third-Order Autoregressive Model, AR (3) Was Fit to Monthly

question 8

Multiple Choice

A third-order autoregressive model, AR (3) was fit to monthly closing stock prices, adjusted for dividends, of Boeing Corporation from January 2006 through August 2008 (closing price on the first trading day of the month) .Based on the results shown below, the estimated model is ________________________ .

• A)Price (t) = 1.223 + .1898 Price (t-1) + .2603 Price (t-2) + 1959 Price (t-3)
• B)Price (t) = 8.362 - .0764 Price (t-1) + .0429 Price (t-2) + .9247 Price (t-3)
• C)Price (t) = 1.223 + .1959 Price (t-1) + .2603 Price (t-2) + .1898 Price (t-3)
• D)Price (t) = 8.362 + .9247 Price (t-1) + .0429 Price (t-2) - .0764 Price (t-3)
• E)None of the above.

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Definitions:

Fixed Overhead Volume

A measurement of the costs that remain constant regardless of the company's level of production or business activity.

Overapplied

In cost accounting, this refers to a situation where the allocated overhead costs exceed the actual overhead costs incurred.

Variable Overhead Rate

The per-unit cost of overhead that changes with the level of production or activity.

Efficiency Variances

The differences between actual costs and the standard or budgeted costs based on the efficient use of resources.