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:

Periodic inventory system

An inventory accounting system where updates to inventory levels are made on a periodic basis, rather than each time a sale or purchase occurs.

Physical inventory

The actual counting and recording of merchandise goods and materials held by a business for the purpose of verifying stock levels and value.

End of the period

Refers to the conclusion of an accounting period, at which financial statements are prepared.

Net realizable value

The estimated selling price of goods, minus the cost of their sale or disposal.