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1. Consider the following quarterly time series.
?Quarter Year 1 Year 2 Year 31
920 1,112 1,246
2 1,056 1,156 1,302
3 1,128 1,124 1,254
4 992 1,078 1,198
?a. Construct a time series plot. What type of pattern exists in the data?
b. Use a multiple regression model with dummy variables as follows to develop an equation to account for seasonal effects in the data. Qtr1 = 1 if quarter 1, 0 otherwise; Qtr2 = 1 if quarter 2, 0 otherwise; Qtr3 = 1 if quarter 3, 0 otherwise.
c. Compute the quarterly forecasts for next year based on the model developed in part (b).
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