The Estimated Regression Equation Is Y_t = 448 + 12t

question 95

Multiple Choice

The estimated regression equation is y_t = 448 + 12t + 18 Qtr1 - 26 Qtr2 + 3 Qtr3. The regression model has three quarterly binaries. The model was fitted to 12 periods of quarterly data starting with the first quarter. Why is there no fourth quarterly binary for Qtr4?

• A)Because the researcher made a mistake. (We must include a binary for each quarter.)
• B)Because it is unnecessary. (Its value is implied by the other three binaries.)
• C)Because the fourth quarter binary is assumed to be the same as the first quarter.
• D)Because there is no seasonality in the fourth quarter in most time series.

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Definitions:

Solvency

The ability of an entity to meet its long-term financial liabilities and obligations.

Current Liabilities

Obligations that a company needs to pay off within one year or within the business's normal operating cycle.

Current Position Analysis

Current position analysis is a review of the operations, resources, and financial health to evaluate a company's current state.

Return

The income produced by an investment, typically expressed as a percentage of the investment’s cost.