Question
Use the scenario described below to answer the following question. You are working as an analyst for GEICO and you are assisting the accounting department
Use the scenario described below to answer the following question.
You are working as an analyst for GEICO and you are assisting the accounting department by forecasting the sales for next year. They have given you 5 years of quarterly sales data that you used to estimate the model and adjusted seasonal indices below to analyze how the number of car insurance policies sold changes over time.
Note, policies sold is measured in millions of policies in the data to make the numbers more manageable.
ln(PoliciesSold)=1.51+0.03tse=0.68 S1 =1.05 S2=1.07 S3=0.93 S4=0.95
Using only the seasonal indices, how does the number of units sold in Quarter 1 compare to the number sold in Quarter 2? Use a negative number to show Quarter 1 as lower and a positive number to show Quarter 1 as higher.
The difference between Quarter 1 and Quarter 2 is___________ percentage points.
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