Trying Many Variables in a Regression Without Basing the Selection

question 6

Multiple Choice

Trying many variables in a regression without basing the selection of candidate variables on a financial or economic theory is popularly referred to as

• A) Data fitting
• B) Data clipping
• C) Data mining
• D) None of the above

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Definitions:

Sign Test

A non-parametric statistical test used to assess the difference between matched pairs of samples when the specific data measurement scale does not meet the requirements for parametric testing.

Binomial Tables

Pre-calculated tables used to find the probability of observing a certain number of successes in a fixed number of binary experiments.

Large-sample Z Statistic

A statistical measure used when the sample size is large, typically applied in hypothesis testing to determine if there is a significant difference between sample statistics and population parameters.

Two-sample T-test

A statistical method used to test if there is a significant difference between the means of two groups.