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# Regression & Correlation Analysis with Durbin Watson Test

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What is the relationship between the price of crude oil and the price you pay at the pump for gasoline? The attached file (Oil & Gas) contains the price for a barrel of crude oil and a gallon of gasoline for 100 weeks ending June 1, 2009.

(a) Construct a scatter plot with oil on the horizontal axis and gasoline on the vertical axis
(b) Use the least-squares method to develop a simple linear regression equation to predict the price of a gallon of gasoline using the price of a barrel of crude oil as the independent variable
(c) Interpret the meaning of the slope b1, in this problem
(d) Plot the residuals versus the time period
(e) Compute the Durbin-Watson statistic
(f) At the 0.05 level of significance, is there evidence of positive autocorrelation among the residuals?
(g) Based on the result of (d) through (f), is there reason to question the validity of the model?