What Will You Conclude About a Regression Model If the Breusch-Pagan

question 5

Multiple Choice

What will you conclude about a regression model if the Breusch-Pagan test results in a small p-value?

• A)The model contains homoskedasticty.
• B)The model contains heteroskedasticty.
• C)The model contains dummy variables.
• D)The model omits some important explanatory factors.

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Definitions:

Speculative Motive

The intention to hold cash for the purpose of taking advantage of future opportunities that may arise, such as bargain purchases or earning profits from price changes.

Investment Opportunities

Investment opportunities refer to avenues where individuals or entities can invest their resources with the expectation of generating a future financial return.

Float Motive

The reason businesses hold onto cash for transactional purposes, allowing them to meet short-term obligations without liquidating investments.

Cash Concentration

The process of consolidating cash from multiple accounts into a single account, aiming to improve the efficiency of cash management and reduce transaction costs.