(Situation N) an Economist Wishes to Study the Monthly Trend $\mathrm { E } \left( \mathrm { Y } _ { t } \right) = \beta _ { 0 } + \beta _ { 1 } \mathrm { t }$

(Situation N) An economist wishes to study the monthly trend in the Dow Jones Industrial Average (DJIA) . Data collected over the past 40 months were used to fit the model $\mathrm { E } \left( \mathrm { Y } _ { t } \right) = \beta _ { 0 } + \beta _ { 1 } \mathrm { t }$ , where $y =$ monthly close of the DJIA and $t =$ month $( 1,2,3 , \ldots , 40 )$ . The regression results appear below:
$$\hat { y } = 88 + 0.25 t \quad R ^ { 2 } = 0.37 \quad \text { MSE } = 144 \quad F = 4.25 \quad \text { Durbin-Watson } d = 0.96$$
-Use the value of the Durbin-Watson test statistic to make a statement about autocorrelation of residuals in the regression model above.

A) There is insufficient evidence (using $\alpha = 0.05$ ) to indicate that positive autocorrelation exists.
B) Since the value lies in the inconclusive region (using $\alpha = 0.05$ ) , we need more information before a definite conclusion can be drawn.
C) Approximately $98.5 \%$ of the residuals lie within 2 standard deviations of their mean 0 .
D) There is sufficient evidence (using $\alpha = 0.05$ ) to indicate that positive autocorrelation exists.