The Distinction Between Endogenous and Exogenous Variables Is

question 12

Multiple Choice

The distinction between endogenous and exogenous variables is

• A)that exogenous variables are determined inside the model and endogenous variables are determined outside the model.
• B)dependent on the sample size: for n > 100, endogenous variables become exogenous.
• C)depends on the distribution of the variables: when they are normally distributed, they are exogenous, otherwise they are endogenous.
• D)whether or not the variables are correlated with the error term.

Know the terms and effects of specific venture investment rounds (e.g., cram-down round).

Understand the valuation techniques applicable to companies with negative cash flows but potential for significant earnings.

Analyze the factors and characteristics that lead to successful venture capital deals.

Understand different financing strategies for companies including last resort options.

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Definitions:

Logical Thinking

The process of reasoning consistently in a structured, orderly, and rational manner to come to a conclusion or solve a problem.

Egocentrism

A cognitive characteristic where an individual has difficulty understanding or assuming any perspective other than their own.

Irreversibility

The concept that some processes or actions cannot be undone or returned to their original state.

Egocentric Thinking

A way of thinking in which a person views everything in relation to themselves, without considering the perspectives or feelings of others.