2. Question 2 After running a regression, you plotted the residual against the p

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2. Question 2 After running a regression, you plotted the residual against the predicted value. You observed that the residuals seem to increase (in absolute value) as the predicted value increases, You therefore transformed the dependent variable by taking the natural logarithm of it. After the transformation is applied you now should see that.. O A. the error term has a constant variance. B. the residuals have a constant spread around the predicted value. C. the residuals are all close to zero. D. the residuals decrease (in absolute value) as the predicted value increases.

Explanation / Answer

Q4) Option C is correct. The residuals are all close to zero

Q5) Option D is Correct. There exists positive first order autocorrelation because test statistic is greater than upper limit

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