When Estimating a VEC Model Using a Two Step Least

question 4

Multiple Choice

When estimating a VEC model using a two step least squares process,what is the first 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:

Cash Dividend

A payment made by a company out of its profits to shareholders in the form of cash.

Financing Activities

Activities that result in changes in the size and composition of the equity and/or borrowings of a company.

Cash Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits.

Net Cash

The balance of cash remaining once cash inflows and outflows have been reconciled.