2 3 4 5 7 910 This Question 1 pt This Test 10 pts Time Remai

2 3 4 5 7 910 This Question: 1 pt This Test: 10 pts Time Remaining: 01:02:08 0 of 10 complete A marketing manager has developed a regression model to predict quarterly sales of his company\'s down jackets based on price and amount spent on advertising. An intern suggests that he include an indicator (dummy) variable for the fall quarter. a) How would you code such a variable? (What values would it have for each quarter?) b) Why does the intern\'s suggestion make sense? c) Do you think a regression with the indicator variable for fall would model down jacket sales better than one without that predictor? a) How would the fall variable be coded? OA, spring-O, summer-0, fall=1, winter-0 OB, spring-2, summer-3, fall-0, winter =1 OC. spring-1, OD. spring-3, summer- 4, fall-1, winter-2 summer-2, fall -3, winter-4 b) Why does the intern\'s suggestion make sense? OA. The company probably spends more on advertising in the fall, so the indicator variable will capture that behavior. OB. Sales of jackets are probably higher in the fall quarter than in other quarters. OC. There is probably a seasonal cycle in the sales of jackets would be modeled well by an indicator variable for fall OD. The suggestion does not make sense. The variation with fall would be captured by the linear regression model already. Click to select your answer.

Solution

A (b)

B (c)

C No without the predictor variable the regression model unable to estimate the sales of Jacket.