TABLE 16-5 a Contractor Developed a Multiplicative Time-Series Model to Forecast the Forecast

Multiple Choice

TABLE 16-5
A contractor developed a multiplicative time-series model to forecast the number of contracts in future quarters, using quarterly data on number of contracts during the 3-year period from 1996 to 1998. The following is the resulting regression equation:
ln Y^{^} = 3.37 + 0.117 X - 0.083 Q₁ + 1.28 Q₂ + 0.617 Q₃
where Y^{^} is the estimated number of contracts in a quarter
X is the coded quarterly value with X = 0 in the first quarter of 1996.
Q₁ is a dummy variable equal to 1 in the first quarter of a year and 0 otherwise. Q₂ is a dummy variable equal to 1 in the second quarter of a year and 0 otherwise. Q₃ is a dummy variable equal to 1 in the third quarter of a year and 0 otherwise.
-Referring to Table 16-5, to obtain a forecast for the fourth quarter of 1999 using the model, which of the following sets of values should be used in the regression equation?

A) X = 15, Q₁ = 1, Q₂ = 0, Q₃ = 0
B) X = 16, Q₁ = 0, Q₂ = 0, Q₃ = 0
C) X = 16, Q₁ = 1, Q₂ = 0, Q₃ = 0
D) X = 15, Q₁ = 0, Q₂ = 0, Q₃ = 0