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The following table shows the annual revenues (in millions of dollars)of a pharmaceutical company over the period 1990-2011. The autoregressive models of order 1 and 2,yt = β0 + β1yt - 1 + εt,and yt = β0 + β1yt - 1 + β2yt - 2 + εt,were applied on the time series to make revenue forecasts.The relevant parts of Excel regression outputs are given below.
Model AR(1):
Model AR(2):
Compare Excel outputs for AR(1)and AR(2)and choose the forecasting model that seems to be better.
Par
A value assigned the shares of capital stock and stated on the stock certificate.
Dividend
A portion of a company's earnings distributed to its shareholders, typically in cash or additional shares.
Dividend Per Share
The sum of money paid by a company to its shareholders, divided by the total number of shares outstanding, usually expressed as a dollar amount per share.
Preferred Stock
A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with no voting rights but with a fixed dividend.
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