How Many Indicator Variables Are Required If There Are P

question 20

Multiple Choice

How many indicator variables are required if there are p seasons in a time series and you are forecasting with a seasonal regression model?

• A)p - 1
• B)p
• C)p + 1
• D)p + 2

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Definitions:

Cost Of Capital

The total cost of funds used for financing a business, including debt and equity.

NPV

Net Present Value, a calculation used to determine the value of a project or investment by discounting future cash flows to the present.

Cash Flow

Total funds inflow and outflow within a business and its effect on liquid assets.

WACC

Weighted Average Cost of Capital; a calculation used to estimate the cost of financing a company's assets, blending debt and equity costs.