Consider a firm subject t

Consider a firm subject t

Consider a firm subject to a quarter-to-quarter variation in its sales. Suppose that the following equation was estimated using quarterly data for the period 2006-2013 (the time variable goes from 1-32). The variables Dand Dand Dare, respectively, dummy variables for the first, second, and third quarters (e.g., D, is equal to 1 in the first quarter and 0 otherwise).Q1= a +bt + C+D+CDa. At the 5% level if significance, perform t- and f- tests to check for statistical significance of the coefficients and the equation. Discuss also the significance of the coefficients and equation in terms of p- values.b. Calculate the intercepts in each of the four quarters. What do the values imply?c. Use this estimated equation to forecast sales in the fourth quarters of 2014.

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