What Is an Appropriate Approach to Testing for 'ARCH Effects

question 5

Multiple Choice

What is an appropriate approach to testing for 'ARCH effects'?

• A) Run a regression, collect the residuals, regress the squared residuals on their lags and conduct a hypothesis test to check whether the coefficients of the lagged squared residuals are equal to zero
• B) Run a regression, collect the fitted values, regress the fitted values on their squared lags and conduct a hypothesis test to check whether the coefficients of the lagged squared fitted values are equal to zero
• C) Employ White's test
• D) All of the above

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Definitions:

Poverty Rates

The proportion of a population living below the poverty line, indicating the level of economic hardship or lack of access to basic necessities.

Same-sex Parent Households

Families where children are raised by parents of the same gender, either biological or adoptive.

Slave Owners

Individuals who owned slaves in the past, typically in contexts where slavery was legally recognized and institutionalized.

18th

Refers to the 18th century, a period from 1701 to 1800, which is often associated with the Enlightenment and significant political and social changes.