Question: Kim K. asks you to develop a demand forecast for her perfume line. Using the data provided, you find a regression model, y = 4

Kim K. asks you to develop a demand forecast for her perfume line. Using the data provided, you find a regression model, y = 4 + 3.36x1 + 5x2, with the undernoted parameters.

Parameters: R2= 0.77

Sig of F: 0.02

p-value of x1= 0.01

p-value of x2= 0.03

x1 denotes Consumer Income

x2 denotes Advertising

y denotes Demand

Would you advise Kim that the above model can be (technically) used for forecasting, assuming that a confidence level of 97% is the norm?

a.

Yes
b.

Cannot say
c.

No

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