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.

---

Definitions:

Securities And Exchange Commission

A U.S. government agency that oversees securities transactions, markets, and investment practices to protect investors.

Depreciation

Depreciation is an accounting method of allocating the cost of a tangible or physical asset over its useful life, reflecting wear and tear, or obsolescence of the asset.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and profits.

Double-Entry Bookkeeping

Process by which accounting transactions are entered; each individual transaction always has an offsetting transaction.