Random Walk

[gargijain]

Yes, my bad…

@S2000magician

@gargijain

But why 1.01 and why not 1%?

@S2000magician

ln(a) − ln( b) = ln(a / b)

So, if sales grew by 1% last quarter, then,

ln(Sales__t-1) − ln(Sales_t-2) = ln(Sales_t-1 / Sales_t__-2) = ln(1.01)

Similarly for the 2% growth four quarters ago.

Because sales _ grew _ by 1%, so new sales divided by old sales = 1.01.

You need to think about this stuff.

[gargijain]

Is the following understanding correct?

We do not check for the significance of the intercept term in simple/ multiple linear regression but we check it after we first difference the data.

[tickersu]

@gargijain

Is the following understanding correct?

We do not check for the significance of the intercept term in simple/ multiple linear regression but we check it after we first difference the data.

In general, no, that is not correct.

[gargijain]

Yes…u r right…

@tickersu

@gargijain

Is the following understanding correct?

We do not check for the significance of the intercept term in simple/ multiple linear regression but we check it after we first difference the data.

In general, no, that is not correct.