Explain How You Would Determine If a Variable Is an Explanatory

question 35

Essay

Explain how you would determine if a variable is an explanatory variable or anextraneous variable?
Again, you may use an example to support your answer but notas a substitute for an explanation.

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Definitions:

Maintenance Margin

The minimum equity an investor must maintain in a margin account after the purchase has been made, to keep the position open.

Initial Margin

The minimum amount of funds required to open a position in the securities market, used as a deposit to cover some of the credit risk of the counterparty.

Stop-Buy Order

A type of stock market order that buys a security once its price ascends to a specific point, usually to limit losses or enter the market at a favorable momentum.

Firm Commitment

An underwriting agreement in which an underwriter buys all the securities from the issuer and resells them to investors.