Volatility Clustering

question 4

Multiple Choice

Volatility clustering

• A)is evident in most cross-sections.
• B)implies that a series is serially correlated.
• C)can mostly be found in studies of the labor market.
• D)is evident in many financial time series.

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Definitions:

Contribution

The amount of money or resources that an individual or entity provides towards a particular project, investment, or cause.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed to variable costs.

Fixed Costs

Costs that do not fluctuate with changes in production level or sales volume, such as rent, salaries, and insurance.

EBIT

Earnings Before Interest and Taxes, also known as EBIT, is a way to evaluate a company's profit without considering tax and interest expenses.