Rajesh Singh is the CFO of TBZ Ltd, a London-based retailer of fine jewelry and
ID: 3371151 • Letter: R
Question
Rajesh Singh is the CFO of TBZ Ltd, a London-based retailer of fine jewelry and watches. Singh notices that the price of gold has begun to increase. If economic activity continues to pick up, the price of gold is likely to accelerate its rate of increase as both demand and the inflation rate increase. Multiple Regression Baker conducts a series of regression analyses using all suggested independent variables based on their average quarterly values to model the gold demand. The regression results for this equation is shown in Exhibit 2: Exhibit 2: 2003-2013 Quarterly Data (44 Observations) R-squared 0.55 Durbin-Watson statistic 3.89 Independent Variables Coefficient t-statistic 3.7 14.5 7.8 Intercept Gold price Silver price Platinum price Labor costs GDP (EU) 3.9 4.7 1.2 3.5 0.82 0.000274 2.4 5.7 Personal Income (EU) 0.000314 2.1 resence of positive Baker is concerned about the equation described in Exhibit 2. He states, "The Durbin-Watson statistic indicates the p autocorrelation at the 5% level." Which of the following best describes Baker's statement in reference to autocorrelation? A Correct B Incorrect CNot enough information to make a judgementExplanation / Answer
From the information "Baker is concerned about the equation described in Exhibit 2. He states, The Durbin-Watson statistic indicates the p autocorrelation at the 5% level".
'Correct' is the best describes Bakers statement in reference to autocorrelation.
Option: A
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