If a Johansen "Max" Test for a Null Hypothesis of 1

question 21

Multiple Choice

If a Johansen "max" test for a null hypothesis of 1 cointegrating vectors is applied to a system containing 4 variables is conducted, which eigenvalues would be used in the test?

• A) The largest 1
• B) The Second largest
• C) The Second smallest
• D) The smallest

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Definitions:

Business Owners

Individuals who own and have invested resources in a business, responsible for strategic decision-making and managing operations.

Large Sums

Considerable amounts of money, often involved in financial transactions or investments.

Independence

The state of being free from the control or influence of others, often referring to self-sufficiency in business operations.

Small Businesses

Enterprises characterized by fewer employees and lower revenue compared to larger companies.