To Measure the Fit of the Probit Model, You Should

question 38

Multiple Choice

To measure the fit of the probit model, you should:

• A)use the regression R².
• B)plot the predicted values and see how closely they match the actuals.
• C)use the log of the likelihood function and compare it to the value of the likelihood function.
• D)use the fraction correctly predicted or the pseudo R².

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Definitions:

Financing Activity

Transactions and events that involve raising capital and repaying investors, including issuing equity, obtaining loans, and repaying debt, as part of the cash flow statement.

Statement of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, segregating the analysis into operating, investing, and financing activities.

Operating Activity

Business activities directly related to the production and delivery of goods and services for profit.

Indirect Method

In the context of cash flow statement preparation, the indirect method adjusts net income for the effects of non-cash transactions and changes in working capital to calculate cash flow from operating activities.