@ Iginla2010 - I did not see the other limits that were put on the second time through. Inconclusive is correct for the second bounds.
Why have you guys messed up the 4 in there? There is only 3 rules. if DW stat < DL reject null if DL < DW < DU inconclusive if DW > DU fail to reject null. I don’t see any 4.
pepp Wrote: ------------------------------------------------------- > Why have you guys messed up the 4 in there? There > is only 3 rules. > > if DW stat < DL reject null > if DL < DW < DU inconclusive > if DW > DU fail to reject null. > > I don’t see any 4. You need to review DW. Don’t worry, you still have time.
the CFAI mentions the 4 rule in a footnote. most finace data shows positive correlation so you would be in the range bellow 2. pepp, i think if you are short on time, your rules will be fine. i really dont think CFAI is going to test you on a footnote…
Is the conclusion that CFAI provide a wrong answer for this question? The correct answer should be Serial Correlation is NOT present.
^ if CFAI showed you a similar question then YES they are wrrong… remember we can’t be discussing actual questions from mocks or exams on an online form. 
However, we can complain that CFAI mock exam sucks and provide so many wrong answers. The above statement is NOT a violation of ethical code and standard, is it?
nop. We should start a petition on AF demanding better mocks. Each mock has 10 mistakes. Please CFAI take the mocks seriously like we take our studying.
It’s a wrong answer. I’m positive about that. There is NO significant positive serial correlation.
gulf, I think something is wrong in the answer. If you fail to reject the null hypothesis of “no serial correlation” cuz DW stat > dh crit value, then in stats it really means indirectly, that serial correlation must be 0. I’d recommend you stay away from 4 too. I took a look at the footnote and it makes sense, but stay away from those kind of calcs. Instead its better to remember. 0-2 DW indicates positive correlation 2 indicates 0 correlation 2-4 indicates negative correlation all of this simple derivation of DW = 2(1-r).
If DW > Upper limit = fail to reject H0 = > no evidence of + correlation.
pepp, your rules are very off 0-2 DW indicates positive correlation not always, their is a range that bettwen 0-2 that is unsure, and a range that is no positive corolation 2 indicates 0 correlation this is good 2-4 indicates negative correlation again, not always, their are unsure and no negative correlation ranges…