SCENARIO 16-12
a Local Store Developed a Multiplicative Time-Series Model $$\log _ { 10 } \hat { Y } = 6.102 + 0.012 X - 0.129 Q _ { 1 } - 0.054 Q _ { 2 } + 0.098 Q _ { 3 }$$

SCENARIO 16-12
A local store developed a multiplicative time-series model to forecast its revenues in future
quarters, using quarterly data on its revenues during the 5-year period from 2009 to 2013. The
following is the resulting regression equation: $$\log _ { 10 } \hat { Y } = 6.102 + 0.012 X - 0.129 Q _ { 1 } - 0.054 Q _ { 2 } + 0.098 Q _ { 3 }$$
where $\hat { Y }$ is the estimated number of contracts in a quarter
$X$ is the coded quarterly value with $X = 0$ in the first quarter of 2008 .
$Q _ { 1 }$ is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise.
$Q _ { 2 }$ is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise.
$Q _ { 3 }$ is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise.
-Referring to Scenario 16-12, in testing the significance of the coefficient of X in the regression equation (0.012) which has a p-value of 0.0000. Which of the following is the best
Interpretation of this result? a) The quarterly growth rate in revenues is significantly different from $0 \% ( \alpha = 0.05 )$ .
b) The quarterly growth rate in revenues is not significantly different from $0 \%$ ( $\alpha =$ $0.05 )$
c) The quarterly growth rate in revenues is significantly different from $1.2 \% ( \alpha =$ $0.05$ ).
d) The quarterly growth rate in revenues is not significantly different from $1.2 \% ( \alpha =$ 0.05).

Correct Answer:

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