In a GARCH(p,q)model,what Does the Q Indicate

question 2

Multiple Choice

In a GARCH(p,q) model,what does the q indicate?

• A)the number of lagged h terms
• B)the number of lagged e² terms
• C)the number of endogenous variables in a system
• D)the number of excluded exogenous variables that can be instruments

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Definitions:

Face Amount

The total amount of money that will be paid at maturity by a financial instrument such as a bond or life insurance policy.

Unamortized Premium

The portion of the premium paid over the par value of a bond that has not yet been expensed in the company's financial statements.

Carrying Amount

The book value of assets and liabilities on a company's balance sheet, calculated as the original cost minus any depreciation, amortization, or impairment costs.

Interest-Bearing Note

A debt instrument that specifies the amount borrowed, interest rate, and maturity date, obligating the borrower to pay interest.