Use the Following to Answer the Question(s) Below

question 30

Multiple Choice

Use the following to answer the question(s) below.
Weekly commodity prices for heating oil (in cents) were obtained and regressed against time. Below is the regression output and residual plots from fitting a linear model.
-Which of the following statement is true?

• A) The normal probability plot shows no bend and indicates that Independence assumption is satisfied.
• B) The residual plot has no pattern and indicates that Independence assumption is satisfied.
• C) The histogram is relatively bell-shaped and indicates that Independence assumption is satisfied.
• D) The t-test for the regression slope indicates that Independence assumption is satisfied.
• E) The histogram and plots show that not all assumptions and conditions for regression inference are met. It looks like data are highly correlated over time. So, we should test the model for autocorrelation.

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Definitions:

Loan Repay

Loan repayment is the act of paying back borrowed funds to the lender, typically in installments that include both principal and interest.

Notes Payable

Financial obligations represented by written promissory notes requiring the borrower to repay the amount borrowed plus interest.

Accounts Payable

Liabilities or money owed by a business to its creditors or suppliers for goods and services received.

Non-interest Bearing

Refers to debt or a financial instrument that does not accrue interest over time, meaning the borrower only repays the principal amount.