A Company Has Developed a Linear Trend Regression Model Based

question 14

Multiple Choice

A company has developed a linear trend regression model based on 16 quarters of data.The independent variable is the measure of time (t = 1 thru 16 where quarter 1 is winter quarter,2 is spring,etc.) .The company has also developed seasonal indexes for each quarter as follows: The linear trend forecast equation is: = 120 + 56t. Given this information,which of the four quarters beginning next winter (period t = 17) will have the highest seasonally adjusted forecast?

• A)Winter
• B)Spring
• C)Summer
• D)Fall

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