Jackie Stewart has done research on the relationship between stock returns on the New York Stock Exchange (NYSE) and the Tokyo Stock Exchange (TSE) by regressing NYSE returns onto TSE returns in order to determine if there is any first order serial correlation between the market closing price in Tokyo and the market opening price in New York. Looking at 3 years of quarterly data (n=12) Stewart has found that the Durbin-Watson statistic for these two series is 1.435. If Stewart wants to test for serial correlation at the 5% significance level, what will be the upper and lower bounds that he will use to determine if serial correlation exists?

Group of answer choices

a. upper bound is 1.023; lower bound is 0.697

b. upper bound is 1.579; lower bound is 0.812

c. upper bound is 1.331; lower bound is 0.971

d. upper bound is 1.274; lower bound is 0.569