Question: Please solve and explain Consider the following time series data. Quarter Year 1 Year 2 Year 3 1 4 6 7 2 2 3 6
Please solve and explain
Consider the following time series data.
| Quarter | Year 1 | Year 2 | Year 3 |
| 1 | 4 | 6 | 7 |
| 2 | 2 | 3 | 6 |
| 3 | 3 | 5 | 6 |
| 4 | 5 | 7 | 8 |
a. Construct a time series plot. What type of pattern exists in the data?
b. Create the following dummy variables: Qtr1 = 1 if quarter 1, 0 otherwise; Qtr2 = 1 if quarter 2, 0 otherwise; Qtr3 = 1 if quarter 3, 0 otherwise. Create a variable t such that t = 1 for quarter 1 of year 1, t = 2 for quarter 2 of year 1, , t = 12 for quarter 4 of year 3. Use these dummy variables and t to develop an estimated regression equation to account for seasonal effects and any linear trend in the data. What is the forecast for quarter 1 of next year?
c. What is the forecast for quarter 2 of next year?
e. What is the forecast for quarter 4 of next year?
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