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Question 3 (Time-series forecasting) 3.1 (3 points) Dummy variables corresponding to first, second, and third quarters were added to the linear trend model. These indicator
Question 3 (Time-series forecasting) 3.1 (3 points) Dummy variables corresponding to first, second, and third quarters were added to the linear trend model. These indicator variables are X1, X2, and X3 (the excluded category is quarter 4). The estimated trend-and-season model is Supply = 100 + 20t - 15X, - 20X, - 10X, where t is the number of periods (quarters) elapsed since the beginning of the series. Based on this regression equation, which graph below shows the time-series plot for expected supply, starting at t = 0 and ending at t = 10 (note: the relationship should be a time-series of dots connected by lines). Assume that at t = 0, we are in quarter 1. Expected Supply 300 250 200 150 100 4 (A)
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