SCENARIO 16-14 a Contractor Developed a Multiplicative Time-Series Model to Forecast

question 58

Multiple Choice

SCENARIO 16-14 A contractor developed a multiplicative time-series model to forecast the number of contracts in future quarters, using quarterly data on number of contracts during the 3-year period from 2011 to 2013.The following is the resulting regression equation: where is the estimated number of contracts in a quarter. X is the coded quarterly value with X = 0 in the first quarter of 2011. is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise. Q is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise. is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise.
-Referring to Scenario 16-14, the best interpretation of the coefficient of Q (0.617) in the regression equation is:

• A)the number of contracts in the third quarter of a year is approximately 62% higher than the average over all 4 quarters.
• B)the number of contracts in the third quarter of a year is approximately 62% higher than it would be during the fourth quarter.
• C)the number of contracts in the third quarter of a year is approximately 314% higher than the average over all 4 quarters.
• D)the number of contracts in the third quarter of a year is approximately 314% higher than it would be during the fourth quarter.

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Definitions:

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