Understanding Trend Models in Time-Series Analysis

Trend models are essential tools in time-series analysis, often used to identify underlying patterns and predict future values based on historical data. One common form of a trend model is a linear regression model, which assumes that the relationship between the dependent variable and time is linear.

Consider the following simple linear trend model:

Y = a + bT

Where:

• Y = the value of the variable at time T
• a = the intercept
• b = the slope of the trend line
• T = time period

Given the information about this trend model, which of the following statements is true?