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

question 40

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, in testing the significance of the coefficient for Q₁ in the regression equation (-0.129) which has a p-value of 0.492. Which of the following is the best interpretation of this result?

• A) The revenues in the first quarter of the year are significantly different from the revenues in an average quarter (α = 0.05).
• B) The revenues in the first quarter of the year are not significantly different from the revenues in an average quarter (α = 0.05).
• C) The revenues in the first quarter of the year are significantly different from the revenues in the fourth quarter (α = 0.05).
• D) The revenues in the first quarter of the year are not significantly different from the revenues in the fourth quarter (α = 0.05).

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Definitions:

Brainstem

The lower extension of the brain where it connects to the spinal cord, involved in regulating vital functions such as heart rate, breathing, and sleep cycles.

Spinal Cord

The major bundle of nerves running down the spine, connecting the brain to the rest of the body, responsible for transmitting sensory and motor information.

Deafferentation

Loss of incoming sensory input, usually due to damage to sensory fibers; also, loss of any afferent input to a structure.