Given a text T, and several options, according to the question posed in the text T to choose the most appropriate option from the options as the answer, please directly output the most appropriate option, do not need to output the explanation.

Doug Abitbol is a portfolio manager for Polyi Investments, a hedge fund that trades in the United States. Abitbol manages the hedge fund with the help of Robert Olabudo, a junior portfolio manager.Abitbol looks at economists’ inflation forecasts and would like to examine the relationship between the US Consumer Price Index (US CPI) consensus forecast and actual US CPI using regression analysis. Olabudo estimates regression coefficients to test whether the consensus forecast is unbiased. Regression results are presented in Exhibit 1. Additionally, Olabudo calculates the 95% prediction interval of the actual CPI using a US CPI consensus forecast of 2.8.
| Exhibit 1(Continued) |
| CoefficientsStandard Errort-Statistic |
| Intercept0.00010.00020.5351US CPI consensus forecast0.98300.015563.6239 |

| Exhibit 1Regression Output:Estimating US CPI |
| Multiple R | 0.9929 |
| R-squared | 0.9859 |
| Standard error of estimate | 0.0009 |
| Observations | 60 |


To conclude their meeting, Abitbol and Olabudo discuss the limitations of regres-sion analysis. Olabudo notes the following limitations of regression analysis: Limitation 1: Public knowledge of regression relationships may negate their future usefulness. Limitation 2: Hypothesis tests and predictions based on linear regression will not be valid if regression assumptions are violated.
Which of Olabudo’s noted limitations of regression analysis is correct?
Option A:Only Limitation 1
Option B:Only Limitation 2
Option C:Both Limitation 1 and Limitation 2

Answer: C