The Null Hypothesis for Testing for the Presence of Autocorrelation

question 4

Multiple Choice

The null hypothesis for testing for the presence of autocorrelation is

• A)the error terms are correlated over time.
• B)the error terms are not correlated over time.
• C)the error terms follow an AR(1)process.
• D)the error terms have constant variance over time.

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Definitions:

Monetary Error

A monetary error refers to inaccuracies or mistakes in financial transactions or accounting, which can impact financial statements or balances.

Confidence Interval

It refers to the range within which we expect a population parameter to lie with a certain degree of confidence, based on sample data.

Sample Mean

The average value of a given characteristic within a sample drawn from a population.

Purchase Order

A formal document issued by a buyer to a seller, detailing the products, quantities, and agreed prices for products or services.