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In: Statistics and Probability

A financial planner tracks the number of new customers added each quarter for a 6 year...

A financial planner tracks the number of new customers added each quarter for a 6 year period. The data is presented below:

Year               Quarter                      New                Year               Quarter          New

2014               I                                   31                    2017               I                       69

                        II                                  24                                            II                      54

                        III                                 23                                            III                     46

                        IV                                16                                            IV                    32

2015               I                                   42                    2018               I                       82

                        II                                  35                                            II                      66

                        III                                 30                                            III                     51

                        IV                                23                                            IV                    38

2016               I                                   53                    2019               I                       91

                        II                                  45                                            II                      72

                        III                                 39                                            III                     59

                        IV                                27                                            IV                    41

Create a simple linear trend regression model. Let t=0 in 2013: IV. This is a computer deliverable.

(a) Interpret the slope coefficient.

(b) Test to see if the number of new customers is increasing over time. Use alpha = 0.01.

(c) Test to see if the model has explanatory power. Use alpha = 0.05.

(d) Forecast the number of new customers in the first and second quarters of 2020.

Create a multiple regression equation incorporating both a trend (t=0 in 2013: IV) and dummy variables for the quarters. Let the first quarter represent the reference (or base) group. Complete (e) thru (h) using your results. This is a computer deliverable.

(e) Test to see if there is an upward trend in new customers. Use alpha = 0.01.

(f) Test to see if the model has explanatory power. Use alpha = 0.05.

(g) Forecast the number of new customers in the first and second quarters of 2020.

(h) Test for the existence of first order autocorrelation, use alpha = 0.05. The calculated dw = 1.19.

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Expert Solution

orchestra answered 1 year ago
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