Consider the Following to Answer the Question(s) Below

question 8

Multiple Choice

Consider the following to answer the question(s) below:
Monthly closing stock prices for a utility company were obtained from January 2014 through August 2015. A regression model was estimated to describe the trend in closing stock prices over time.
-Suppose that for the regression model estimated using the data described, the Durbin-Watson statistic was calculated as 0.5626. Using α = 0.01 we can conclude that

• A) there is evidence of positive autocorrelation.
• B) there is evidence of negative autocorrelation.
• C) there is no evidence of positive autocorrelation.
• D) there is no evidence of negative autocorrelation.
• E) as dL < 0.5626 < dU, the test is inconclusive.

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Definitions:

Government Organizations

Entities established by a government to carry out specific functions or services, operating within the public sector and funded by the government.

Accounting Standards

Rules and guidelines that prescribe the specific accounting methods and procedures to present financial statements accurately and consistently.

Investing Section

Part of a cash flow statement that shows the cash spent on and received from investment activities, indicating how a company is allocating its resources for growth.

Statement of Cash Flows

A financial report that provides a summary of a company's cash inflows and outflows over a specific period.