​A Process {Y_t} Is a Martingale If _____ Is Equal

question 16

Multiple Choice

​A process {y_t} is a martingale if _____ is equal to y_t for all t ≥ 0.

• A)​E(y_t+1|y_t, y_t-1, …, y₀)
• B)​E(y_t+1|y_t-1, …, y₀)
• C)​E(y_t+1, y_t| y_t-1, …, y₀)
• D)​E(y_t+1, y_t| y_t-1, y_t-2)

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Definitions:

Justification

Justification involves providing reasons, explanations, or rationalizations for one's actions or beliefs, often to align with moral, legal, or social standards.

Attitudes

Mental and emotional entities that denote an individual's degree of like or dislike for an item.

Festinger and Carlsmith

Researchers known for their study on cognitive dissonance, demonstrating how experiencing inconsistency among beliefs or behaviors leads to discomfort, which individuals are motivated to reduce.

Cognitive Dissonance Theory

A psychological theory suggesting that individuals experience discomfort when holding two or more conflicting cognitions (beliefs, attitudes) and are motivated to reduce this discomfort.