Posted by **Miss Cheong** on Saturday, November 5, 2011 at 1:16pm.

A linear trend equation for sale of the form Qt = a + bt was estimated for the period 1993-2007 (i.e. t=1993, 1994, 2007) The results of the regression are as follow:

Dependent variable : Qt, R-Square, F-ratio, P-Value on F

Observations : 15, 0.6602, 25.262, 0.0002

Variable, Parameter Estimate, Standard Error, T-ratio, P-value

Intercept 73.71460, 34.08, 2.16, 0.0498

t 3.7621, 0.749, 5.02, 0.0002

a) Evaluate the statistical significance of the estimated coefficients (use 5 percent for significance level) Does this equation indicate a significant trend? (6m)

b) Using this equation, forecast sales in 2008 and 2009. (4M)

c) Comment on the precision of these two forecasts. (4m)

Thank you

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