The Difference Between an Unbalanced and a Balanced Panel Is

question 28

Multiple Choice

The difference between an unbalanced and a balanced panel is that

• A)you cannot have both fixed time effects and fixed entity effects regressions.
• B)an unbalanced panel contains missing observations for at least one time period or one entity.
• C)the impact of different regressors are roughly the same for balanced but not for unbalanced panels.
• D)in the former you may not include drivers who have been drinking in the fatality rate/beer tax study.

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Definitions:

Portfolio

A collection of investments held by an individual or institution, which may include stocks, bonds, real estate, and other financial assets.

Indifference Curves

Graphical representations in economics showing different bundles of goods between which a consumer is indifferent, reflecting preferences of equal utility.

Budget Line

A graphical representation of all possible combinations of two goods that an individual can afford to purchase with a given budget, at given prices.

Risk Averse

Describes individuals or entities that prefer to avoid risk, often opting for safer investments even with potentially lower returns.