In the Linear Probability Model, the Interpretation of the Slope

question 19

Multiple Choice

In the linear probability model, the interpretation of the slope coefficient is

• A)the change in odds associated with a unit change in X, holding other regressors constant.
• B)not all that meaningful since the dependent variable is either 0 or 1.
• C)the change in probability that Y=1 associated with a unit change in X, holding others regressors constant.
• D)the response in the dependent variable to a percentage change in the regressor.

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Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to record any unrecorded income or expenses for that period.

Interest Payable

A liability account showing the amount of interest expense that has accrued but not yet been paid to creditors.

Effective Interest Rate

The actual rate of interest earned or paid on an investment or loan, accounting for the effect of compounding.

Discounted Interest

The process of reducing the interest rate on a loan, calculated in advance and deducted from the principal amount at the time of lending.