Question
Business performance can be affected various economic factors. Data on Sears revenue and interest rate (X4) are collected in an effort to study the
Business performance can be affected various economic factors. Data on Sears revenue and interest rate (X4) are collected in an effort to study the relationship between company revenue and interest rate. See data file Sears. Run a multiple linear regression using Sears revenue as the dependent variable, interest rate, seasonal dummies as the independent variables and answer the following questions. Three season dummies are defined as below. X1=1 if the time of year is the first quarter; 0 otherwise X2=1 if the time of year is the second quarter; 0 otherwise X3=1 if the time of year is the first quarter; 0 otherwise The default category for the dummy variables is the four quarter. 1. Comment how well the model fits the data. Make sure to discuss the criteria used. 2. Interpret the coefficient for X2. 3. Test to determine the validity of the model. Use a=0.05.
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