Answer (B) is correct . Time series analysis is a regression model in which the independent variable is time. In time series analysis, the value of the next time period is frequently dependent on the value of the time period before that. Hence, the error terms are usually correlated or dependent on the prior period; i.e., they are characterized by autocorrelation (serial correlation).
Answer (A) is incorrect because In time series analysis, variance of the error term is usually constant.
Answer (C) is incorrect because In time series analysis, distribution of the error terms is usually normal.
Answer (D) is incorrect because In time series analysis, the expected value of the error term usually equals zero.
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