SEM Models Are Estimated So as To

question 8

Multiple Choice

SEM models are estimated so as to:

• A)maximize the likelihood function.
• B)minimize the difference between the observed and estimated covariance matrices.
• C)minimize the sum of squares between constructs.
• D)minimize the least squared difference.
• E)A and C

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Definitions:

Constant Growth

A model, often referred to as the Gordon Growth Model, that assumes a firm's dividends grow at a consistent rate indefinitely, used to evaluate the fair value of a stock.

Capital Gains Return

The profit realized from the sale of securities or investments which have increased in value over the time they were held.

Super-Normal Voting Rights

Voting rights that are greater than one vote per share, typically granted to certain class of shares to retain control in a company.

Preemptive Right

The right of existing shareholders to purchase additional shares in a company before the company offers them to the public, to maintain their proportionate ownership in the company.