Which of the Following Statements Is True

question 16

Multiple Choice

Which of the following statements is true?

• A)In large samples there are not many discrepancies between the outcomes of the F test and the LM test.
• B)Degrees of freedom of the unrestricted model are necessary for using the LM test.
• C)The LM test can be used to test hypotheses with single restrictions only and provides inefficient results for multiple restrictions.
• D)The LM statistic is derived on the basis of the normality assumption.

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Definitions:

Monthly Payments

Recurring payments made once per month, often in the context of loan repayments or subscriptions.

Compounded Annually

Interest calculation method where interest is added to the principal at the end of each year, enabling interest to be earned on interest in the following year.

Monthly Payments

Regular payments made every month, typically in the context of repaying loans or paying for services.

Borrow

To receive something of value with the promise to return it or its equivalent to the lender at a future date.