Negative Autocorrelation in the Change of a Variable Implies That

question 12

Multiple Choice

Negative autocorrelation in the change of a variable implies that

• A)the variable contains only negative values.
• B)the series is not stable.
• C)an increase in the variable in one period is, on average, associated with a decrease in the next.
• D)the data is negatively trended.

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Definitions:

Salvage Value

The estimated residual value of an asset at the end of its useful life.

Incremental Cost Approach

The incremental cost approach involves evaluating the additional costs and benefits associated with making one decision over another, used to make economically sound choices.

Payback Period

The length of time required for an investment to recover its initial cost out of the cash receipts that it generates.

Required Rate of Return

The minimum annual percentage earned by an investment that will entice individuals or companies to put money into a particular security or project.