Question

A company has developed a linear trend regression model based on 16 quarters of data. The independent variable is the measure of time (t = 1 thru 16 where quarter 1 is winter quarter, 2 is spring, etc.). The company has also developed seasonal indexes for each quarter as follows:

The linear trend forecast equation is:

Given this information, which of the four quarters beginning next winter (period t = 17) will have the highest seasonally adjusted forecast?

A) Winter

B) Spring

C) Summer

D) Fall

Answer

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