a. The following model is estimated:

Yi = 0.674 + 0.996X1t + 0.136X2t, R2 = 0.341; SER = 0.1993; d = 2.403; T = 60

(0.311) (0.442) (0.097)

The estimated residuals, ^ut, are collected from this model and the value preceding the first observation of the sample is set equal to zero. Using this residual series, the following auxiliary regression is estimated over the full sample of 60 observations:

^ut = 0.013+0.034X1t+0.021X2t−0.032 ^ut−1+ηt, R2 = 0.09, SER = 0.0112, d = 1.983, T = 60

(0.062) (0.036) (0.035) (0.012)

Use the Breusch-Godfrey test to determine whether there is evidence of statistically significant first-order autocorrelation at the 5% level.

b. The estimated residuals, ^ut, are collected from the model estimated in Question (a) and the two values preceding the first observation of the sample are set equal to zero. Using this residual series, the following auxiliary regression is estimated over the full sample of 60 observations:

^ut = 0.011 + 0.025X1t + 0.017X2t − 0.03 ^ut−1 + 0.004 ^ut−2 + ηt,

(0.062) (0.036) (0.035) (0.035) (0.01)

R2 =0.096, SER=0.0113, d=1.897, T =60

Use the Breusch-Godfrey test to determine whether there is evidence of statistically

significant second-order autocorrelation at the 5% level.

### Recently Asked Questions

- How does James Giles makes the case for a theory of personal identity that can epistemologically account how our subjective experiences, if we are not

- Quick Inc has 300 000 outstanding Common Shares and 200 000 preferred stock whose preferred dividend is 1.5$ per share. The managers of of Quick Inc are

- Let U = {a, b, c, d, e, f, g, h, i, j, k} A = {a, c, d, f, g, i} B = {b, c, d, f, g} C = {a, b, f, i, j} Determine the following A ∩ C (A ∩ B) ∪ C B − A