Question 2 The finance department of a multinational shipping company has constructed a model for the company's revenues. The research team collected quarterly sales in millions of dollars) for 12 years and estimated the following two models: AS = 15.54 +0.3 (Q1) +0.4 (Q2) +0.9 (Q4) +0.45 A(XI) 0.35 A(X2)+0.25 A(X3) R-squared 0.67 AS = 11.53 +0.12 A(XI) - 0.45 A(X2) + 0.18 A(X3) R-squared 0.35 Where S: is dollar value of the company's sales Q1, Q2, Q4: are dummy variables identifying the corresponding quarter of the year X1: is the dollar amount of the company's promotion expenditure X2: is the dollar price of Brent X3: is the dollar value of the company's investment expenditure a. Explain why a dummy variable for the third quarter of the year is not included in the model b. Would you say that the demand the company faces is characterized as seasonal? C. Based on the information provided, can you tell anything about the company's change of sales across quarters in a typical year? d. Based on the information you are provided, are the variables involved: (a) stationary?, (b) are their levels cointegrated? explain your answers. Question 2 The finance department of a multinational shipping company has constructed a model for the company's revenues. The research team collected quarterly sales in millions of dollars) for 12 years and estimated the following two models: AS = 15.54 +0.3 (Q1) +0.4 (Q2) +0.9 (Q4) +0.45 A(XI) 0.35 A(X2)+0.25 A(X3) R-squared 0.67 AS = 11.53 +0.12 A(XI) - 0.45 A(X2) + 0.18 A(X3) R-squared 0.35 Where S: is dollar value of the company's sales Q1, Q2, Q4: are dummy variables identifying the corresponding quarter of the year X1: is the dollar amount of the company's promotion expenditure X2: is the dollar price of Brent X3: is the dollar value of the company's investment expenditure a. Explain why a dummy variable for the third quarter of the year is not included in the model b. Would you say that the demand the company faces is characterized as seasonal? C. Based on the information provided, can you tell anything about the company's change of sales across quarters in a typical year? d. Based on the information you are provided, are the variables involved: (a) stationary?, (b) are their levels cointegrated? explain your answers