Instruction 14-3
Given Below Are Microsoft Excel Outputs for Various

Instruction 14-3
Given below are Microsoft Excel outputs for various estimated autoregressive (AR) models for a company's real operating revenues (in billions of dollars) from 1985 to 2008.From the data,you also know that the real operating revenues for 2006,2007,and 2008 are 11.7909,11.7757,and 11.5537,respectively.
AR (1) Model:
$$\begin{array} { | l | l | l | l | l | } \hline & \text { Coefficients } & \text { Standard Error } & \text { t Stat } & p \text {-vahue } \\\hline \text { Intercept } & 0.1802 & 0.3980 & 0.4528 & 0.6553 \\\hline \text { XLag1 } & 1.0112 & 0.0497 & 20.3526 & 0.0000 \\\hline\end{array}$$ AR (2) Model:
$$\begin{array} { | l | l | l | l | l | } \hline & \text { Coefficients } & \text { Standard Error } & \text {t Stat } & p \text {-value } \\\hline \text { Intercept } & 0.3005 & 0.4408 & 0.6817 & 0.5036 \\\hline \text { X Lag 1 } & 1.1732 & 0.2347 & 4.9980 & 0.0001 \\\hline \text { X Lag 2 } & - 0.1830 & 0.2507 & 0.7300 & 0.4743 \\\hline\end{array}$$ AR (3) Model:
$$\begin{array} { | l | l | l | l | l | } \hline & \text { Coefficients } & \text { Standard Error } & \text {t Stat } & p \text {-value } \\\hline \text { Intercept } & 0.3130 & 0.5144 & 0.6085 & 0.5509 \\\hline \text { XLag1 } & 1.1737 & 0.2465 & 4.7617 & 0.0002 \\\hline \text { XLag2 } & - 0.0694 & 0.3731 & - 0.1860 & 0.8547 \\\hline \text { XLag3 } & - 0.1221 & 0.2820 & - 0.4330 & 0.6704 \\\hline\end{array}$$
-Referring to Instruction 14-3,if you decide to use AR(3) ,what will the predicted real operating revenue for the company be in 2011?

A) $11.84 billion.
B) $11.59 billion.
C) $12.47 billion.
D) $11.68 billion.