Which of the following statements about autocorrelation are true?
I. Successive residuals are often correlated in time series because an event in one time period often influences the event in the next period.
II. If residuals are correlated,we can use r as the coefficient of correlation and conduct the common tests of hypothesis about regression coefficients.
III. A Durbin-Watson statistic d is used,instead of directly conducting a hypothesis test on r.
A)I only
B)II only
C)II and III
D)I and III

Question

Which of the following statements about autocorrelation are true? 
I. Successive residuals are often correlated in time series because an event in one time period often influences the event in the next period.
II. If residuals are correlated,we can use r as the coefficient of correlation and conduct the common tests of hypothesis about regression coefficients.
III. A Durbin-Watson statistic d is used,instead of directly conducting a hypothesis test on r.
A)I only
B)II only
C)II and III
D)I and III

Quizplus · Accepted Answer

Statement I is true as autocorrelation refers to the correlation between successive residuals in a time series. Statement II is partially true as we can use the coefficient of correlation to test the hypothesis about regression coefficients, but it is not the only method. Statement III is true as Durbin-Watson statistic is used to test for autocorrelation instead of directly testing the correlation coefficient.

Which of the Following Statements About Autocorrelation Are True