Which of the Following Is True

question 2

Multiple Choice

Which of the following is true

• A) GARCH models incorporate mean reversion; EWMA models do not
• B) EWMA models incorporate mean reversion; GARCH models do not
• C) Both GARCH and EWMA models incorporate mean reversion
• D) Neither GARCH nor EWMA models incorporate mean reversion

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Definitions:

Annual Dividend

The total amount of dividends a company pays out to its shareholders in one fiscal year.

Required Return

The minimum expected return by investors for investing in a non-risk-free asset, taking into account the risk associated with the investment.

Stock Payment

Compensation methods using shares of the company's stock, often employed in employee remuneration plans.

Annual Dividends

Refers to the total dividends paid out by a company to its shareholders over a year.