Question 2

The data in the worksheet "Question 2" of "MCD2080 FAT 2 Version C.xlsx" provides information on visitor arrivals for education to Australia from first quarter 2015 to fourth quarter 2019.

a) Use Excel to construct a time series line graph of the number of visitor arrivals to Australia.

Discuss the time series components which are present in the time series.

b) Use Excel to estimate a model comprising a linear trend and quarterly seasonal dummies. Use Quarter 4 as the benchmark quarter.

Refer to the Regression output you have obtained to answer the following questions:

c) Write down the prediction model for the number of visitor arrivals coming to Australia for education.

d) (i) Interpret the regression coefficient for the intercept

ii) Interpret the regression coefficient for time

iii) State and Interpret the regression coefficient for quarter 2

e) To use the above model for forecasting, it is important to evaluate the above model. Discuss at least two appropriate methods you can use to evaluate this model.

f) Assuming there was no Coronavirus pandemic, use this model to forecast what could have been the number of visitors to Australia for an education in the second quarter of 2022.

Show calculations stating the time (t) value first.