Financial Risk Manager Part 1
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Consider the following regression equation utilizing dummy variables for explaining quarterly SALES in terms of the quarter of their occurrence:
SALESₜ = β₀ + β₂D₂,ₜ + β₃D₃,ₜ + β₄D₄,ₜ + eₜ
where:
SALES = a quarterly observation of EPS
D₂,ₜ = 1 if period t is the second quarter, D₂,ₜ = 0 otherwise
D₃,ₜ = 1 if period t is the third quarter, D₃,ₜ = 0 otherwise
D₄,ₜ = 1 if period t is the fourth quarter, D₄,ₜ = 0 otherwise
The intercept term β₀ represents the average value of sales for the:
Consider the following regression equation utilizing dummy variables for explaining quarterly SALES in terms of the quarter of their occurrence:
SALESₜ = β₀ + β₂D₂,ₜ + β₃D₃,ₜ + β₄D₄,ₜ + eₜ
where:
SALES = a quarterly observation of EPS
D₂,ₜ = 1 if period t is the second quarter, D₂,ₜ = 0 otherwise
D₃,ₜ = 1 if period t is the third quarter, D₃,ₜ = 0 otherwise
D₄,ₜ = 1 if period t is the fourth quarter, D₄,ₜ = 0 otherwise
The intercept term β₀ represents the average value of sales for the:
Exam-Like
A
First quarter
B
Second quarter
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