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To find out whether there is a relationship between the amount of financial leverage a firm uses and the return on the firm's assets, you

To find out whether there is a relationship between the amount of financial leverage a firm uses and the return on the firm's assets, you collect information on the debt/equity ratio and return on assets for the "big three" automakers and the average for the auto industry. Estimate the regression of Fords's return on assets against its debt/equity ratio. Compute the Durbin-Watson statistic. Does autocorrelation exist?

de_ratio roa
0.76 0.06
0.81 0.05
0.89 0.06
0.95 0.07
1.02 0.07
1.27 0.03
1.21 0.02
1.22 0.06
1.28 0.09
1.28 0.07
1.26 0.05
1.84 -0.06
2.13 -0.05
2.61 -0.03
2.16 0.08
1.79 0.11
1.58 0.08
1.55 0.09
1.43 0.10
5.66 0.04

H0: ?
Ha: ?
test statistic ?
d_l ?
d_u ?
decision ?

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