the revenues in the third quarter of a year is approximately 9.8% higher than th
ID: 3269347 • Letter: T
Question
the revenues in the third quarter of a year is approximately 9.8% higher than the average over all 4 quarters.
the revenues in the third quarter of a year is approximately 9.8% higher than it would be during the fourth quarter.
the revenues in the third quarter of a year is approximately 25.31% higher than the average over all 4 quarters.
the revenues in the third quarter of a year is approximately 25.31% higher than it would be during the fourth quarter.
the revenues in the third quarter of a year is approximately 9.8% higher than the average over all 4 quarters.
the revenues in the third quarter of a year is approximately 9.8% higher than it would be during the fourth quarter.
the revenues in the third quarter of a year is approximately 25.31% higher than the average over all 4 quarters.
the revenues in the third quarter of a year is approximately 25.31% higher than it would be during the fourth quarter.
Explanation / Answer
The coefficient of a linear regression model represents the rate of change of the dependent variable with respect to the associated independent variable assuming other variables to remain fixed.
So, in this case, 0.098 represents the rate of change of revenue with respect to the third quarter assuming other factors to be constant.
Now, note that the variables Q1, Q2 and Q3 are binary variables taking only values 0 or 1. As we are considering the coefficient for Q3, so we would assume that Q2 and Q1 are 0.
If all the three variables Q1, Q2 and Q3 are zero, it means we are talking about the fourth quarter. And in that case -
E[Y] = 6.102 + 0.012* E[X]
And for third quarter the model is -
Y = 6.102 + 0.012 (X) + 0.098
So, E[Y] = 6.2 + 0.012* E[X]
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So, the average revenue in the third quarter of a year is approximately 9.8% higher than it would be during fourth quarter.
So, second option is correct.
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