Interpret the first quarterly index. In other words, what is the value of the se

Question

Interpret the first quarterly index. In other words, what is the value of the series in the first quarter as compared to the average?

Interpret the fourth quarterly index. In other words, what is the value of the series in the fourth quarter as compared to the average?

Make a forecast for all four quarters of next year. (Round your answers to 2 decimal places.)

Six years of quarterly data of a seasonally adjusted series are used to estimate a linear trend model as t = 143.70 + 1.23t. In addition, quarterly seasonal indices are calculated as 1 = 0.95, 2 = 0.97, 3 = 1.11, and 4 = 1.15.

Explanation / Answer

a-1) 5% below

a-2) 15% above

b)

Six years would be 24 quarters. Hence, we need to predict for 25, 26, 27 and 28.

Q1= 143.70+1.23(25)=174.45

Q2= 143.70+1.23(26)=175.68

Q3= 143.70+1.23(27)=176.91

Q4= 143.70+1.23(28)=178.14

Seasonally adjusted

Q1=174.45*0.95=165.7275

Q2=175.68*0.97=170.4096

Q3=176.91*1.11=196.3701

Q4=178.14*1.15=204.861

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