Volatility Clustering

question 4

Multiple Choice

Volatility clustering

• A)is evident in most cross-sections.
• B)implies that a series is serially correlated.
• C)can mostly be found in studies of the labor market.
• D)is evident in many financial time series.

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Definitions:

Compensated Surety

A guarantor who receives compensation for guaranteeing the performance or obligations of another party.

Accommodation Surety

A third party who guarantees the debt or obligation of another without benefit to themselves, often to help the borrower obtain a loan.

Guarantor

An individual or entity that agrees to be responsible for another's debt or performance under a contract if the primary party does not meet their obligations.

Guaranty Contract

A legal agreement where a guarantor agrees to fulfill the financial obligations of a debtor to a lender, in case the debtor fails to do so.