Question

The correlation in error terms that arises when the error terms at successive points in time are related is termed _____. a. autocorrelation b. leverage c. multicorrelation d. parallel correlation

Answer 1

The correlation in error terms that arises when the error terms at successive points in time are related is termed autocorrelation

The correct answer is an option (a).

Correlation is the mutual connection between two or more variables. These variables can be dependent or independent but there should be random variables.

Autocorrelation is the degree of correlation between the values of the same variables across different data.

Instead of correlation between two different variables, the correlation is between two values of the same variable at times i and i + k.

It is used for the following two purposes:

- To detect non-randomness in data.

- To identify an appropriate time series model if the data are not random.

Therefore, The correlation in error terms that arises when the error terms at successive points in time are related is termed autocorrelation

The correct answer is an option (a).

Learn more about autocorrelation here:

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