A Regression Model Involved 5 Independent Variables and 126 Observations

question 41

Multiple Choice

A regression model involved 5 independent variables and 126 observations. The critical value of t for testing the significance of each of the independent variable's coefficients will have _____.

• A) 131 degrees of freedom
• B) 125 degrees of freedom
• C) 130 degrees of freedom
• D) 4 degrees of freedom

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Definitions:

Basis Risk

Risk attributable to uncertain movements in the spread between a futures price and a spot price.

Short Hedger

An investor who enters into futures contracts to protect against potential price declines in an asset they hold.

Futures Price

The agreed-upon price for the sale/purchase of an asset at a future date, as determined in a futures contract.

Metals

Elements that are typically hard, shiny, malleable, fusible, and ductile, with good electrical and thermal conductivity, used in a wide range of industrial and decorative applications.