Xander Feng is a quantitative analyst with Red Star Securities Ltd., a company b

Question

Xander Feng is a quantitative analyst with Red Star Securities Ltd., a company based in Shanghai, China. Red Star provides stock brokering and investment advisory services to institutional investors. Extending its regular business, the firm also maintains equity and fixed income investment research teams. Feng is a member of this team Feng is forecasting quarterly sal es of Xiomi Inc., a smart phone manufacturer based in China. The regression model is: Sales-bo +bi Sales 1 The regression results for the model are presented in the table below: Regression statistics Observations 120 Coefficient Standard Erron Intercept 313.24 99.43 Lag 1 0.67 0.16 Sales for one quarter were 1,137. Forecasted sales for the next quarter shall be closest to A 762 1,075 C1,137

Explanation / Answer

from given data; least square regression equation :yhat=313.24+0.67*t

hence forecasted sales for next quarter =313.24+0.67*1137=1075

hence option B is correct

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