Question

Which of the following specifies the negative residual autocorrelation? a) Residuals that are all close to zero b) Acomplete randomness in the residuals c) Accyclical pattern in the residuals d) An altering pattern in the residuals

Answer 1

Answer:

4 option is the right answer

Explanation:

Negative residual autocorrelation implies a negative relationship between one residual and the immediately preceding or immediately following ones. This implies that, if negative autocorrelation is present, the residuals will be changing sign more frequently than they would if there were no autocorrelation. Thus negative autocorrelation would result in an alternating pattern in the residuals, as they keep crossing the time axis. A cyclical pattern would have arisen in the residuals if they were positively autocorrelated. This would be since adjacent residuals would have the same sign more frequently than would have been the case if there were no autocorrelation, resulting in the time series plot of the residuals not crossing the time axis very often. A complete randomness in the residuals would occur if there were no autocorrelation, while the residuals being all close to zero could occur if there were significant autocorrelation in either direction or if there were not significant autocorrelation!

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Answer 2

Answer:

Zero residual that are close to zero

Explanation: