Question
Use the information below to answer the following questions. Suppose we want to estimate how revenue, measured in dollars, changes both over time and within
Use the information below to answer the following questions. Suppose we want to estimate how revenue, measured in dollars, changes both over time and within each year. You estimate the following model usingquarterlydata forfiveyears. Assume all the variables are significant at the 5% level. Revenue is measured in dollars, t is a standard time variable, and Q2(d), Q3(d), and Q4(d)are quarterly dummy variables.
Based on the estimated model above, which of the following would be the correct interpretation for the estimated R2of the model?Hint, be sure to pay attention to the natural log transformation in this model.
We are 0.81% of the way toward perfectly predicting the company's revenue using this model.
We are 0.81% of the way toward perfectly predicting the natural log of the company's revenue using this model.
We are 81% of the way toward perfectly predicting the company's revenue using this model.
We are 81% of the way toward perfectly predicting the natural log of the company's revenue using this model.
We are 81 percentage points of the way toward perfectly predicting the company's revenue using this model.
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