If $X _ { t } \text { and } Y _ { t }$

question 1

Multiple Choice

If $X _ { t } \text { and } Y _ { t }$ are cointegrated, then the OLS estimator of the coefficient in the cointegrating regression is

• A) BLUE
• B) unbiased when using HAC standard errors.
• C) unbiased even in small samples.
• D) consistent.

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Definitions:

Interest Rate Change

Modification in the percentage that determines the amount of interest to be paid on a loan or received on deposits over time.

Compounded Quarterly

A method of calculating interest where the accumulated interest is added to the principal sum every three months, leading to interest earnings on interest.

Interest

A fee for the benefit of loaning money, usually stated as a yearly interest rate.

Payments

These are amounts paid or to be paid by one party to another in exchange for goods or services or as repayment of a loan.