"Ordinary Least Squares" Is a Technique That Can Be Used

question 16

Multiple Choice

"Ordinary least squares" is a technique that can be used to

• A)identify the best model.
• B)determine which variables in a model are endogenous and which are exogenous.
• C)obtain a bar graph showing successive quarterly increases in output.
• D)obtain a line describing consumption behavior in the real world.
• E) determine the direction of causation between consumption and income.

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Definitions:

IRR Method

The Internal Rate of Return (IRR) method is a financial analysis tool used to evaluate the profitability of investments by finding the interest rate at which the net present value of all cash flows (both positive and negative) from a particular project equals zero.

Hurdle Rate

The minimum rate of return on an investment that a manager or company requires before pursuing a project or investment.

Capital-Budgeting

The process by which organizations evaluate potential major projects or investments to determine their cost-effectiveness and alignment with business strategy.

Risk-Free Rate

The hypothetical yield of a risk-free investment, typically mirrored by the interest rate on sovereign debt.