The Russian Wheat Crop Fails, Driving Up Wheat Prices in the U.S

question 61

Multiple Choice

The Russian wheat crop fails, driving up wheat prices in the U.S. This is an example of:

• A) idiosyncratic risk.
• B) diversification.
• C) systematic risk.
• D) quantifiable risk.

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Definitions:

Durbin-Watson Statistic

A test statistic used to detect the presence of autocorrelation in the residuals from a regression analysis.

Critical Values

Critical values are specific points on the scale of a statistical distribution that are used to determine the threshold at which the null hypothesis of a test can be rejected.

Positive Autocorrelation

Occurs when a variable's current value is positively related to its past values in a time series.

Durbin-Watson Statistic

A statistical measure employed to identify if there is autocorrelation at the first lag within the residual values following a regression analysis.