Consider the Following Simple Linear Regression Model: Y = β₀

question 57

Multiple Choice

Consider the following simple linear regression model: y = β₀ + β₁x + ε. The explanatory variable is ________.

• A) y
• B) x
• C) ε
• D) β₀

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Definitions:

Specified Cash Flows

Specified Cash Flows refers to particular amounts of money that are expected to be received or paid out at defined times during the life of a financial instrument or investment.

Exchange

Exchange signifies a platform or system where various entities trade commodities, securities, currency, and other instruments.

Future

A financial contract obligating the buyer to purchase, or the seller to sell, a particular asset at a predetermined future date and price.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a stated amount of an underlying security at a specified price within a specified time.