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In: Advanced Math

below are EXCEL outputs for various estimated autoregressive models for Coca-Cola's real operating revenues (in billions...

below are EXCEL outputs for various estimated autoregressive models for Coca-Cola's real operating revenues (in billions of dollars) from 1975 to 1998. From the data, we also know that the real operating revenues for 1996, 1997, and 1998 are 11.7909, 11.7757 and, 11.5537, respectively.                                                                                                                                                                                                                         AR(1) Model:

Coefficients Standard Error t Stat P-value
Intercept 0.1802077 0.39797154 0.452815546 0.655325119
XLag1 1.011222533 0.049685158 20.35260757 0.643735615

AR(2) Model:

Coefficients Standard Error t Stat P-value
Intercept 0.30047473 0.4407641 0.681713257 0.503646149
X Lag 1 1.17322186 0.234737881 4.998008229 7.98541E-05
X Lag 2 -0.183028189 0.030716669 -0.730020026 0.034283347

AR(3) Model:

Coefficients Standard Error t Stat P-value
Intercept 0.313043288 0.514437257 0.608515972 0.550890271
XLag1 1.173719587 0.246490594 4.761721601 0.000180926
XLag2 -0.069378567 0.373086508 -0.185958391 0.004678245
XLag3 -0.122123515 0.282031297 -0.433014053 0.30448392

Referring to Table 16-4 and using a 5% level of significance, what is the model that uses the most lag variables?

Question 7 options:

linear

AR(3)

AR(2)

AR(1)

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