# EconHM27 - Question#1 This question is based on the Hotel...

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Question #1 This question is based on the Hotel Occupancy example that starts on page 116 (slide 37) of your course packet. You are given the following quarterly data for hotel occupancy. Answer the following questions based on your calculations from Excel. 1. The value of the coefficient on the linear term in a linear trend model is 0.005245865 2. Based purely on the trend, the predicted value for the third quarter of 1993 would be 0.697072932 3. Using the original data, the third quarter of 1993 is 4.580161729 percent above the predicted value for the series (when the prediction is based purely upon trend). 4. Fill in the following table of seasonal (quarterly) indices. For this problem, round your answers to three decimal points (Notice that if you do this, no normalization of seasonal averaged ratios is needed. In the next problem, however, you will need to normalize the seasonal averaged ratios so they add up to 4). Quarter Seasonal Index Quarter 1 0.878 Quarter 2 1.076 Quarter 3 1.171 Quarter 4 0.875 5. Once the seasonal indexes are computed, one way we use them is to smooth or adjust the original time series so that they stand corrected for seasonal fluctuations or imbalances. The formula you need is very simple, and it is provided on slide 46 (page 118)

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## This note was uploaded on 02/11/2010 for the course ECON 203 taught by Professor Petry during the Spring '09 term at University of Illinois, Urbana Champaign.

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EconHM27 - Question#1 This question is based on the Hotel...

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