Which of the Following Conditions Must Be Fulfilled for the Durbin

question 11

Multiple Choice

Which of the following conditions must be fulfilled for the Durbin Watson test to be valid?
(I) The regression includes a constant term
(ii) The regressors are non-stochastic
(iii) There are no lags of the dependent variable in the regression
(iv) There are no lags of the independent variables in the regression

• A) (i), (ii) and (iii) only
• B) (i) and (ii) only
• C) (i), (ii), (iii) and (iv)
• D) (i), (ii), and (iv) only

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Definitions:

Depreciation

A method to allocate the cost of a tangible asset over its useful life.

Utilities

Services such as electricity, gas, water, and sewer that are used by businesses and households, often considered basic necessities.

Raw Material

The basic material from which a product is made, typically unprocessed or minimally processed before being used in production.

Work in Process

The inventory account that records products in production but not yet completed.