Mortgage interest rates. Refer to the data on annual mortgage interest rate 1Yt2, Exercise 14.41 (p. 14-37). You fit the simple linear regression model, E1Yt2 = b0 + b1t, to the data for the years 1992–2019 1t = 0, 1, 2,

c, 272.

a. Find and plot the regression residuals against t. Does the plot suggest the presence of autocorrelation? Explain.

b. Conduct the Durbin-Watson test (at a = .05) to test formally for the presence of positively autocorrelated regression errors.

c. Comment on the validity of the inference concerning model adequacy in light of the result of part b.