1. QUESTION 1 A linear trend model in which the dependent variable's units are thousands of dollars implies that the dependent variable changes 2. A A constant percentage . each period B A constant amount each . period C An increasing amount each . period D A decreasing amount each . period E. None of the above QUESTION 2 1. A quadratic trend model (in which the dependent variable's units are thousands of dollars) in which the coefficients on both trend and trend squared are negative (such as Yt = 1000 - 10*t - 2*t2 with t going from 1 to 20) implies that the dependent variable 2. A Falls a constant amount each . period B Falls a smaller amount each . period C Falls a larger amount each . period D Falls a constant percentage . each period E. None of the above QUESTION 3 1. When deciding which of two similar linear models to implement (one model has one additional variable but other variables are identical) the single most important factor to consider would be 2. A . B . C . D . 1. R-squared Standard error of the estimate Coefficient significance None of the above QUESTION 4 Suppose you estimate a quadratic trend model using a time series with 20 annual observations and obtain the following equation: Yt=25+0.8t+0.04t2 The forecast value for period 21 equals: 34.4 4 B 378. . 64 C 59.4 . 4 D 42.6 . 4 A . 1. QUESTION 5 Suppose you estimate a lagged model using a time series with 20 annual observations and obtain the following equation: Y t=10+0.8 Y t-1 If the value of Y t in period 20 equals 6, the forecast value for period 21 equals: A 10 . B 10.8 . C 14.8 . D 4.8 . E. None of the above 1. QUESTION 6 Questions 6 through 8 relate to the following. You are estimating a time series model for automobile sales. If you have 8 complete calendar years of quarterly data on auto sales (auto sales in thousands of cars) as the dependent variable and run the linear trend regression with trend and quarterly indicator variables (note sample size = 32; in the last period the trend value = 32 and t represents the \"trend\" variable). The regression you obtain is: The predicted auto sales (in thousands of cars) 3 quarters after the sample ends equals (round to nearest whole car) A 2914 . B 2210 . C 2980 . D 3632 . E. None of the above QUESTION 7 1. Comparing quarter1 and quarter2 auto sales to each other, holding all else constant, we would expect 2. A . Quarter1 sales to (excluded) sales B Quarter1 sales to . sales C Quarter1 sales to . sales D Quarter1 sales to . (excluded) sales E. Quarter2 sales to (excluded) sales be 76 thousand higher than quarter4 be 76 thousand higher than quarter2 be 76 thousand lower than quarter2 be 288 thousand higher than quarter4 be 364 thousand higher than quarter4 QUESTION 8 1. Do any of the quarterly dummy variables add explanatory power to the model at alpha level 0.05? 2. A . B . C . Yes, because the p-value of quarter2 is below .05. No, because the R-square value is low. No, because at the p-values of quarter1 and quarter3 are above .05. D Yes, because the p-value of trend is below .05. . E. None of the above QUESTION 9 1. 2. 1. A risk profile shows All possible monetary values and their associated probabilities for a single decision B All possible outcomes and their associated monetary values for a . single decision C All possible probabilities and their associated EMVs for a single . decision D All possible EMVs and their associated monetary values for a . single decision E. None of the above. A . QUESTION 10 Questions 10 and 11 relate to the following: Intel is deciding whether to build a new fabrication facility. The fixed cost of the facility is 2.5 billion dollars. Intel anticipates demand (and the associated production and probability) as: Demand Production Probability Low 1 million units 0.1 Medium 10 million units 0.6 High 50 million units 0.3 Intel also anticipates that gross profit (prior to considering facility costs) per unit will be $120. The expected sales of this decision model equals: A . 15 million units B 21.1 million . units C 61 million . units D 2532 million . units E. None of the above QUESTION 11 1. The expected monetary value of this decision model equals 2. A . 2532 million dollars B 3.2 million . dollars C 32 million . dollars D 21.1 million . dollars E. None of the above 1. QUESTION 12 Questions 12 through 15 relate to the following. Suppose you have $20,000 to invest for 1 year and 4 possible investment options: Option Return Option Return Return Return Option Return Return Return Return Option Return Return Return 1: Money market fund = 1.2% guaranteed 2: Bond fund = 5% with likelihood = 10% = 3% with likelihood = 30% = 1% with likelihood = 60% 3: Stock fund = 11% with likelihood = 10% = 5% with likelihood = 20% 0% with likelihood = 50% = -10% with likelihood = 20% 4: Real Estate fund = 25% with likelihood = 30% = 4% with likelihood = 30% = -25% with likelihood = 40% The investment with the maximum EMV equals A . B . C . D . Money market fund Bond fund Stock fund Real estate fund E. None of the above QUESTION 13 1. 2. The investment with the smallest EMV is A . B . C . D . Money market fund Bond fund Stock fund Real estate fund E. None of the above QUESTION 14 1. 2. The maximax investment is: A . B . C . D . Money market fund Bond fund Stock fund Real estate fund E. None of the above 1. 2. QUESTION 15 The maximin investment is A . B . C . D . Money market fund Bond fund Stock fund Real estate fund E. None of the above