A Major Advantage of the Cubic Spline Approach Is That

question 15

Multiple Choice

A major advantage of the cubic spline approach is that it can be estimated using ordinary least squares (OLS) regression.Which of the following is NOT related to this estimation feature?

• A)OLS may be used because the price of bonds is the just the product of cashflows and discount functions summed up over all cash flows.
• B)OLS enables the use of all the bonds in the data set,even though there are more bonds than parameters to be estimated.
• C)OLS works for polynomials of any order in the splining function.
• D)OLS may be used because it satisfies the smoothness condition required for the forward curve in the estimation.

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Definitions:

Cow Pox

A disease of cows caused by the cowpox virus, which is related to the variola virus of smallpox. Historically important as the basis for the first smallpox vaccine developed by Edward Jenner.

Lymphocytes

A type of white blood cell essential for immune responses, playing a crucial role in recognizing and fighting off pathogens.

Secondary Immune Response

The rapid production of antibodies induced by a second exposure to an antigen several days, weeks, or even months after the initial exposure.

Antigenic Determinants

Specific parts of a foreign protein or pathogen that the immune system recognizes and responds to, also known as epitopes.