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.

---

Definitions:

Net Income

The remaining profit of a company after all financial obligations and taxes are taken out of its total income.

Net New Equity

The amount of money raised by a company through the issuance of new shares, minus any shares repurchased.

Equity Repurchases

The process by which a company buys back its own shares from the marketplace, reducing the amount of outstanding stock.

New Equity Sales

New equity sales refer to the process of issuing new shares of stock to investors in order to raise capital for the corporation.