Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 1. Let Y, be a company's sales. D1, D2, D3, and D4 are seasonal dummies, and Time is a time trend. Consider the following

image text in transcribed
Problem 1. Let Y, be a company's sales. D1, D2, D3, and D4 are seasonal dummies, and "Time" is a time trend. Consider the following models with the OLS estimates for 199001- 201904. Model 1: Log(Y) = 0.863 Adj. R2 = 0,00. AIC=0.572, SIC=0.591 Model 2: Log(Y) = 0.163 +0.098 D1 +0.445 D2 +0.546 D3 +0.678 D4 Adj. R2 = 0.56, AIC -0.381, SIC -0.401 Model 3: Log(Y) -0.451 +0.1578D1 +0.291D2 +0.516D3 +0.721D4 +0.327 Time Adj. R2 = 0.76, AIC = 0.335, SIC -0.371 Model 4: Y=0.563+0.108D1+0.254D2 +0.461D3 +0.752D4 +0.273Time + 0.102Time 2 Adj. R = 0.79, AIC -0.290, SIC -0.299 a. (2 points) What are the 3 main components (of a time series) of a time-series? b. (2 points) Do the above models include all the components? Explain clearly. c. (3 points) Given the above estimates, which model do you prefer for forecasting? Explain with enough reasoning Page 1 of 10

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Cases An Interactive Learning Approach

Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt

5th edition

132567237, 978-0132998345, 132998343, 978-0132567237

More Books

Students also viewed these Accounting questions

Question

Distinguish between prejudice and discrimination.

Answered: 1 week ago