=+seasonal dummy variables for months.

M19_SHAR8696_03_SE_C19.indd 715 14/07/14 7:37 AM 716 CHAPTER 19 Time Series Analysis Dependent variable is: Log price R squared = 92.0% R squared (adjusted) = 90.2%

s = 0.0377 with 66 - 13 = 53 degrees of freedom Variable Coeff SE(Coeff) t-ratio P-value Intercept 2.04566 0.0164 125 60.0001 Year since 2002 0.071754 0.0030 24.2 60.0001 Feb 0.002682 0.0210 0.128 0.8988 Mar 0.030088 0.0210 1.43 0.1574 Apr 0.053455 0.0210 2.55 0.0138 May 0.058316 0.0210 2.78 0.0075 Jun 0.044912 0.0221 2.03 0.0471 Jul 0.055008 0.0221 2.49 0.0159 Aug 0.061186 0.0221 2.77 0.0077 Sep 0.057329 0.0221 2.60 0.0122 Oct 0.039903 0.0221 1.81 0.0764 Nov 0.012609 0.0221 0.571 0.5704 Dec -0.085243 0.0221 -0.386 0.7011

a) Interpret the slope.

b) Interpret the intercept.