A Company Hires You to Develop a Linear Regression Forecasting

question 104

Multiple Choice

A company hires you to develop a linear regression forecasting model.Based on the company's historical sales information,you determine the intercept value of the model to be 1,200.You also find the slope value is -50.If after developing the model you are given a value of X = 10,which of the following is the resulting forecast value using this model?

• A)-3,800
• B)700
• C)1,700
• D)1,040
• E)12,000

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Definitions:

Real Interest Rate

The interest rate that has been adjusted to remove the effects of inflation, reflecting the real cost of funds to the borrower and the real yield to the lender.

Inflation

The rate of increase in the general price level for goods and services, leading to a decline in buying power.

Inflation

The pace at which the average price for goods and services climbs, weakening the capacity to purchase.

Uncertainty

A situation where the outcomes or consequences of an action, decision, or event are unknown.