Assume that Assumptions TS.1, TS.2, TS.3, and TS.4 all hold. (i) Suppose we think that the errors 5ut6 follow an AR(1) model with parameter r and so we apply the Prais-Winsten method. If the errors do not follow an AR(1) model—for example, suppose they follow an AR(2) model, or an MA(1) model—why will the usual Prais-Winsten standard errors be incorrect?

There are two major tests of readiness for college: the act and the sat. act scores are reported on a scale from 1 to 36. the distribution of act scores in recent years has been roughly normal with mean µ = 20.9 and standard deviation s = 4.8. sat scores are reported on a scale from 400 to 1600. sat scores have been roughly normal with mean µ = 1026 and standard deviation s = 209. reports on a student's act or sat usually give the percentile as well as the actual score. the percentile is just the cumulative proportion stated as a percent: the percent of all scores that were lower than this one. tanya scores 1260 on the sat. what is her percentile (± 1)?