The Linear Trend Model, _t = 660 + 2t

question 11

Multiple Choice

The linear trend model, _t = 660 + 2t starting with t = 1, for seasonally adjusted monthly sales was estimated using monthly data from for five years. Furthermore, the seasonal index for October was found to be 0.92. Which of the following is the forecast for the month of October next year?

• A) 660
• B) 800
• C) 736
• D) 749

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Definitions:

Cumulative Preferred Stock

A type of preferred stock that accrues dividends in the event that any dividends are missed, ensuring that preferred shareholders are paid both missed and current dividends before any are paid to common shareholders.

Common Stock

A type of equity security that represents ownership in a corporation, with voting rights and potential for dividends.

Dividends

Distributions made to shareholders by a company, often from its earnings.

Par Common Stock

The nominal or face value assigned to common stock shares in the charter of a corporation.