A Proposed Structural Model Involves Four Constructs, Two of Which

question 55

Multiple Choice

A proposed structural model involves four constructs, two of which are exogenous. X1 and X2 together cause Y1, which in turn causes Y2. What term describes this model?

• A) recursive
• B) nonrecursive
• C) descriptive
• D) empirical
• E) None of the above

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Definitions:

Coupon

The interest rate stated on a bond when issued, which is paid by the issuer to the bondholder at specified intervals.

Indenture

A formal legal agreement, contract, or document, especially one outlining the terms of a bond or trust.

Deferred Call

Call provision prohibiting the company from redeeming the bond before a certain date.

Coupon Rate

The interest rate on a bond, expressed as a percentage of the bond's face value, paid by the bond issuer to the bondholder at specified intervals.