Given the Estimated Model _t = B₀ + B₁t

question 7

Multiple Choice

Given the estimated model _t = b₀ + b₁t, the one-step-ahead and multistep-ahead forecasts are possible, if we know or can predict, future values of the ________.

• A) dummy variable
• B) explanatory variable
• C) response variable
• D) dependent variable

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Definitions:

Present Value

The present worth of a sum of money or cash flows expected in the future, based on a certain rate of return.

Cash Flow

The combined value of financial transactions into and out of an enterprise, crucially affecting its cash reserves.

Present Value

is the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Discount Rate

The rate of interest utilized to calculate the current value of future cash flows in a discounted cash flow assessment.