Which of the Following Statements Is True When the Dependent

question 9

Multiple Choice

Which of the following statements is true when the dependent variable, y > 0?

• A)Taking log of a variable often expands its range.
• B)Models using log(y) as the dependent variable will satisfy CLM assumptions more closely than models using the level of y.
• C)Taking log of variables make OLS estimates more sensitive to extreme values.
• D)Taking logarithmic form of variables make the slope coefficients more responsive to rescaling.

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Definitions:

Treasury Bills

Short-term government securities with maturities ranging from a few days to 52 weeks, often considered risk-free investments.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable, and inventories.

DSO

Days Sales Outstanding, a financial metric that measures the average number of days that a company takes to collect payment after making a sale.

Seasonal Sales

Sales that fluctuate during certain times of the year due to seasonal factors, such as holidays or weather changes.