In Comparing the ARCH $( q )$ Model with GARCH $( p , q )$

question 22

Multiple Choice

In comparing the ARCH $( q )$ model with GARCH $( p , q )$ for $p \geq 1$ ,which of the following statements is most likely to be valid?

• A)The GARCH model always delivers a higher volatility than the ARCH model because of the extra terms in the variance equation.
• B)The GARCH model is aimed at delivering more persistent volatility.
• C)The volatility of volatility is lower in the GARCH model than in ARCH.
• D)The volatility of volatility is higher in the GARCH model than in ARCH.

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Definitions:

Thyroxine-binding Globulin

A plasma protein that transports thyroxine (T4) and triiodothyronine (T3) thyroid hormones in the bloodstream.

Thyroid Hormones

Hormones produced by the thyroid gland, crucial for regulating metabolism, energy generation, and growth.

Metabolized

The process of breaking down substances within the body to produce energy, or the conversion of substances into other forms within the body.

Thyroid Follicle

The basic structural unit of the thyroid gland, consisting of a spherical grouping of thyroid cells surrounding a cavity filled with colloid.