Which of the Following Statements Correctly Identifies the Difference Between

question 19

Multiple Choice

Which of the following statements correctly identifies the difference between an autoregressive model and a vector autoregressive model?

• A)In an autoregressive model, the dependent variable is expressed as a function of its own lag, whereas in a vector autoregressive model, the dependent variable is expressed as a function of the lag of an explanatory variable.
• B)In an autoregressive model, the dependent variable is expressed as a function of the lag of an explanatory variable, whereas in a vector autoregressive model, the dependent variable is expressed as a function of its own lag.
• C)In an autoregressive model several series are modeled in terms of their own past, whereas in a vector autoregressive model only one series is modeled in terms of its own past.
• D)In an autoregressive model one series is modeled in terms of its own past, whereas in a vector autoregressive model several series are modeled in terms of their past.

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Definitions:

Retirement

The period in life when one chooses to permanently leave the workforce behind, usually upon reaching a certain age or financial standing.

Compounded Semi-Annually

A method where interest is calculated and added to the principal at six-month intervals, resulting in interest on interest.

Annuity

A series of equal payments at regular intervals.

Semi-Annual Payments

Payments made twice a year, often used in the context of loans, bonds, or other financial instruments.