When Estimating a VEC Model Using a Two Step Least

question 2

Multiple Choice

When estimating a VEC model using a two step least squares process,what is the second step?

• A)use least squares to estimate the cointegrating relationship
• B)use least squares to estimate first differences as a function of estimated residuals
• C)use least squares to estimated residuals as a function of first differences
• D)use least squares to estimate first differences as a function of lagged differences

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Definitions:

Operating Income Before

An earnings before interest and taxes measure that evaluates a company's profit from operations before the impact of financing and tax expenses.

Operating Income Before

Income derived from regular business operations before deductions such as interest and taxes.

Support Department Allocations

The process of distributing overhead costs from support or service departments to producing or operating departments based on their usage of those services.

Operating Income

Earnings before interest and taxes (EBIT), indicating the profitability from regular business operations.