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1. Suppose that liquor sales is estimated using a seasonal model given by: Liquor Sales = 30 + 3*FALL + 5*

DRQ #11 November 10, 2011 (4pts). 1. Suppose that liquor sales is estimated using a seasonal model given by: Liquor Sales = 30 + 3*FALL + 5*SPRING – 2*SUMMER, where Fall, Spring, and Summer are dummy variables. Winter is the base season.

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1. Suppose that liquor sales is estimated using a seasonal model given by: Liquor Sales = 30 + 3*FALL + 5*

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  1. DRQ #11 November 10, 2011 (4pts) 1.Suppose that liquor sales is estimated using a seasonal model given by: Liquor Sales = 30 + 3*FALL + 5*SPRING – 2*SUMMER, where Fall, Spring, and Summer are dummy variables. Winter is the base season. • (0.5pt) (a)Our forecast for liquor sales in the winter is 30. (0.5pt) (b) Our forecast for liquor sales in the spring is 35. • (2.0pts)(c) Suppose now that the base season is the Summer. What are the coefficient values in the regression, • Liquor Sales = b0 + b1FALL + b2SPRING + b3WINTER + et? • bo=28; b1 =5; b2 =7; b3 =2 • 2. Suppose the total sales for a local grocery store from Monday to Friday are given as: • Day Monday Tuesday Wednesday Thursday Friday • Amount $90,000 $95,000 $98,000 $100,000 $105,000 • (0.5pt) (a) Give the general model representation of a MA(2) process. • (0.5pt) (b) Calculate the MA(2) prediction sales for Thursday. $96,500.

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