Consider the Following to Answer the Question(s) Below

question 27

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.
-Which of the following statement is true about autocorrelation?

• A) We use autocorrelation to predict values of y for values x far from the ones used to find the linear model equation.
• B) When a regression model applied to autocorrelated data, the Independence assumption is satisfied.
• C) When data highly correlated over time, each data point is similar to those around it. The Independence assumption is violated.
• D) We use χ2 statistic to test for autocorrelation.
• E) Autocorrelation occurs only if there is at least one extreme outlier.

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