The "Before and After" Specification, Binary Variable Specification, and "Entity-Demeaned

question 21

Multiple Choice

The "before and after" specification, binary variable specification, and "entity-demeaned" specification produce identical OLS estimates

• A)as long as there are observations for more than two time periods.
• B)if you use the heteroskedasticity-robust option in your regression program.
• C)for the case of more than 100 observations.
• D)as long as T = 2 and the intercept is excluded from the "before and after" specification.

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Definitions:

Common Stock

Represents ownership shares issued by a corporation, giving holders voting rights and a share in the company's profits via dividends.

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions to shareholders, reinvested in the business.

Measure Of Liquidity

Indicators that demonstrate a company's ability to cover its short-term obligations with its liquid assets.

Debt-Equity Ratio

A gauge of how much a corporation leans on debt, by dividing all owed sums by the total equity of its stockholders.