Suppose the following model describes changes in Company ABC’s sales: ∆ ABCt = 0.078 - 0.095(∆ ABCt-1) The current change (first difference) in the company’s sales growth rate is 0.04. Use this information to answer the questions below. (NB: For all the questions below, give your final answers to 3 decimal places.)
Suppose the following model describes changes in Company ABC’s sales:
∆ ABCt = 0.078 - 0.095(∆ ABCt-1)
The current change (first difference) in the company’s sales growth rate is 0.04.
Use this information to answer the questions below. (NB: For all the questions below, give your final answers to 3 decimal places.)
Question 1
Calculate the mean-reverting level for changes in the company’s sales growth rate. (Give your answer in decimals).
Question 2
What is the best prediction of the next change? (Give your answer in decimals)
Question 3
What is the prediction of the change following the next change? (Give your answer in decimals)
Question 4
suppose we want to compute the four-quarter moving average of Company ABC’s sales as of the beginning of the first quarter of 2022. ABCs sales in the previous four quarters were as follows: 1Q 2021, R 1,200,000; 2Q 2021, R 800,000; 3Q 2021, R 750,000; and 4Q 2021, R 1,600,000. Calculate the four-quarter moving average of sales as of the beginning of the first quarter of 2022.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
How did you get 0,158 in question 1? Please show me your calculation.
by Bartleby Expert