What Is the Primary Advantage of a GARCH Model Rather

question 9

Multiple Choice

What is the primary advantage of a GARCH model rather than an ARCH model?

• A)fewer parameters to be estimated
• B)fewer assumptions required
• C)normally distributed estimators
• D)lower variance of estimates

---

Definitions:

Minimum Distribution

The required minimum amount that must be withdrawn annually from retirement accounts after reaching a certain age.

Plan Balance

The total current value of an individual's account in a retirement plan, reflecting contributions, investment gains or losses, and withdrawals made over time.

Simplified Employee Pension

A Simplified Employee Pension (SEP) is a retirement plan that allows employers to make contributions to the retirement accounts of their employees, simplifying the process for small businesses.

Annual Contribution

The amount of money an individual contributes to a retirement, investment, or savings account within a single fiscal year.