Given below are EXCEL outputs for various estimated autoregressive models for a company's real operating revenues (in billions of dollars) from 1989 to 2012. From the data, you also know that the real operating revenues for 2010, 2011, and 2012 are 11.7909, 11.7757 and 11.5537, respectively. First-Order Autoregressive Model:
Coefficients Standard Error t Stat P-value Intercept 0.1802 0.3980 0.4528 0.6553 XLag1 1.0112 0.0497 20.3526 0.0000
Second-Order Autoregressive Model:
Coefficients Standard Error t Stat P-value Intercept 0.3005 0.4408 0.6817 0.5036 X Lag 1 1.1732 0.2347 4.9980 0.0001 X Lag 2 -0.1830 0.2507 -0.7300 0.4743
Third-Order Autoregressive Model:
Coefficients Standard Error t Stat P-value Intercept 0.3130 0.5144 0.6085 0.5509 XLag1 1.1737 0.2465 4.7617 0.0002 XLag2 -0.0694 0.3731 -0.1860 0.8547 XLag3 -0.1221 0.2820 -0.4330 0.6704
Using a 5% level of significance, what is the appropriate autoregressive model for the company's real operating revenue?a. Second-Order Autoregressive Modelb. Any of the abovec. First-Order Autoregressive Modeld. Third-Order Autoregressive Model
If one decides to use the Third-Order Autoregressive model, what will the predicted real operating revenue for the company be in 2014?