A regression analysis is assumed to be free of serial correlation when the Durbin-Watson statistic for the regression is approximately equal to:
A) -2.
B) 2.
C) 1.
D) -1.
E) 0.

Question

Quizplus · Accepted Answer

The Durbin-Watson statistic ranges from 0 to 4, where a value of 2 indicates no serial correlation. Values between 0 and 2 indicate positive autocorrelation, while values between 2 and 4 indicate negative autocorrelation. A value of 1 or near 1 indicates that there may be no serial correlation, but this is not always the case. Therefore, the best answer is B, as it is closest to the ideal value of 2.

A Regression Analysis Is Assumed to Be Free of Serial