In the Case of Exact Identification

question 39

Multiple Choice

In the case of exact identification

• A)you can use the J-statistic in a test of overidentifying restrictions.
• B)you cannot use TSLS for estimation purposes.
• C)you must rely on your personal knowledge of the empirical problem at hand to assess whether the instruments are exogenous.
• D)OLS and TSLS yield the same estimate.

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Definitions:

Horizontal

In economics and finance, relating to the analysis or movement across time or among peers in a linear or even manner.

Vertical

A specific industry or group of companies that operates within the same segment of the economy, often within a supply chain.

Terminal Values

The projected value of an asset, investment, or company at the end of a specific period, often used in discounted cash flow analysis.

Target's Stock

Refers to the equity securities of a company that is the object of a merger or acquisition interest.