Consider the following time series data:

Quarter	Year 1	Year 2	Year 3
1	4	6	7
2	2	3	6
3	3	5	6
4	5	7	8

a). Use a multiple regression model with dummy variables as follows to develop an equation to account for seasonal effects in the data. Q1=1 if quarter 1, 0 otherwise; Q2=1 if quarter 2, 0 otherwise;Q3=1 if quarter 3, 0 otherwise.

What is the R^2 (coefficient of determination)? Four decimal places in Excel.

b). Use a multiple regression model to develop an equation to account for trend AND seasonal effects in the data. Use dummy variables as follows to capture seasonal effects: Q1=1 if quarter 1, 0 otherwise; Q2=1 if quarter 2, 0 otherwise; Q3=1 if quarter 3, 0 otherwise. Create a variable t such that t=1 for quarter 1 in year 1, t=2 for quarter 2 in year 1, ...t=12 for quarter 4 in year 3.

What is the R^2 (coefficient of determination)? Four decimal places in Excel.