Instruction 14-4
a Contractor Developed a Multiplicative Time-Series Model to Forecast

Multiple Choice

Instruction 14-4
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 2008 to 2010.The following is the resulting regression equation:
$\log _ { 10 } \hat { Y } = 3.37 + 0.117 X - 0.083 Q _ { 1 } + 1.28 Q _ { 2 } + 0.617 Q _ { 3 }$
Where
$$\hat { Y }$$ is the estimated number of contracts in a quarter
X is the coded quarterly value with X = 0 in the first quarter of 2008.
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 Instruction 14-4,to obtain a forecast for the fourth quarter of 2011 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