TABLE 16-12 A Local Store Developed a Multiplicative Time-Series Model to Forecast

question 63

Multiple Choice

TABLE 16-12
A local store developed a multiplicative time-series model to forecast its revenues in future quarters, using quarterly data on its revenues during the 4-year period from 2005 to 2009. The following is the resulting regression equation:
log₁₀ = 6.102 + 0.012 X - 0.129 Q₁ - 0.054 Q₂ + 0.098 Q₃
where is the estimated number of contracts in a quarter.
X is the coded quarterly value with X = 0 in the first quarter of 2005.
Q₁ is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise.
Q₂ is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise.
Q₃ is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise.
-Referring to Table 16-12, the best interpretation of the constant 6.102 in the regression equation is

• A) the fitted value for the first quarter of 2005, prior to seasonal adjustment, is log₁₀(6.102).
• B) the fitted value for the first quarter of 2005, after to seasonal adjustment, is log₁₀(6.102).
• C) the fitted value for the first quarter of 2005, prior to seasonal adjustment, is 10⁶.¹⁰².
• D) the fitted value for the first quarter of 2005, after to seasonal adjustment, is 10⁶.¹⁰².

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Definitions:

Tossing

The act of throwing something lightly or casually, often used in the context of flipping a coin or similar objects.

Coin

A piece of hard material, typically metal, used as money, bearing an official stamp or design.

Outcome

The result or consequence of an experiment, test, or study.

Quantitative

Refers to data that can be quantified or measured and expressed numerically, allowing for statistical analysis.