Which of the following statements is true?
A)When explanatory variables are not strictly exogenous, the t test for serial correlation is valid.
B)When explanatory variables are not strictly exogenous, the Durbin Watson test for serial correlation is valid.
C)Breusch-Godfrey test can be used to check for second order serial correlation.
D)White test can be used to check for second order serial correlation.

Question

Quizplus · Accepted Answer

The Breusch-Godfrey test is specifically designed to test for higher order serial correlation in the residuals of a regression model, making it suitable for checking second order serial correlation. The other options are incorrect because the validity of the t test and the Durbin Watson test for serial correlation is compromised when explanatory variables are not strictly exogenous, and the White test is used for testing heteroskedasticity, not serial correlation.

Which of the Following Statements Is True