Which of the Following Scenarios Might Allow You to Try

question 29

Multiple Choice

Which of the following scenarios might allow you to try and test the exogeneity condition of an instrumental variable empirically?

• A) When you know your instrument is relevant beforehand.
• B) When you can estimate the model using generalized method of moments.
• C) When you have two instrument variables and two endogenous variables.
• D) When you have two instrument variables and one endogenous variable.

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Definitions:

Technological Dependency

Reliance on technology to perform daily activities or business operations, which can increase vulnerability to technological failures or cyber threats.

Investment Account

An account held at a financial institution or brokerage that is used to hold securities, stocks, bonds, and other investments.

Dividend Receivable

The amount of declared dividends owed to shareholders but not yet paid out by the company.

Equity in Investee Income

The portion of income attributed to a parent company from its investment in another company, based on the parent's ownership percentage.