Suppose the following are the seasonal indices for the first

Suppose the following are the seasonal indices for the first three quarters of the year for a quarterly series:

Quarter

Seasonal Index

Q1

70.4

Q2

82.6

Q3

105.8

Remember that the seasonal indices should average 100 so you should be able to infer the seasonal index for Q4.


Furthermore, suppose that the estimated coeffcients from a regression of the deseasonalized series on Time are given below:

Coefficients

Intercept

2,172

Time

52.3

What is the trend projection of the series for period 66? (please show work and round your answer to 1 decimal place)

Solution

Q4 = ( 400 - 70.4 - 82.6 - 105.8 ) = 141.2.......

TREND PROJECTION = 2172 + ( 52.3 * 66 ) = 5623.8......