Suppose That a Researcher Estimates a GARCH(1,1) Model and Obtains

question 12

Multiple Choice

Suppose that a researcher estimates a GARCH(1,1) model and obtains a log likelihood function (LLF) value of 71.22. He is interested in testing whether an ARCH(1) model is a better model at describing volatility. If he estimates a model which imposes the necessary restrictions and obtains an LLF value of 68.21, what would be the conclusion of his likelihood ratio test (assuming a 5% significance level) ?

• A) Statistical evidence suggesting that ARCH(1) is better than GARCH(1,1)
• B) Statistical evidence suggesting that ARCH(1) is not better than GARCH(1,1)
• C) Statistical evidence suggesting that GARCH(1,1) is better than ARCH(1)
• D) We cannot say because we would need to know the number of observations

Comprehend how immigration affects a country's production capabilities.

Analyze how external conditions, such as natural disasters or viruses, impact economic production.

Understand the relationship between economic growth and outward shifts in the production possibility frontier.

Learn about comparative advantage and its significance in international trade.

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Definitions:

Gender Typing

Gender typing encompasses the acquisition of a traditional gender role, involving the behaviors, beliefs, and attitudes that society considers appropriate for males or females.

Neuroticism

A personality trait characterized by anxiety, fear, moodiness, worry, envy, frustration, jealousy, and loneliness.

X Chromosome

The sex chromosome found in both men and women. Females have two X chromosomes; males have one. An X chromosome from each parent produces a female child.

Biopsychosocial Approach

A broad view that attributes disease outcome to the intricate, variable interaction of biological factors, psychological factors, and social factors.