Identifying the Causal Effects of a Policy by Looking at Two

question 27

Multiple Choice

Identifying the causal effects of a policy by looking at two samples that lie on either side of a threshold is called

• A) difference-in-differences.
• B) statistical significance.
• C) regression discontinuity.
• D) intention to treat.

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Definitions:

Coupon Rate

The interest rate paid by fixed-income securities, determined as a percentage of the principal value.

Marginal Tax Rate

The tax rate applicable to the last dollar of an individual's or entity's taxable income.

Cost of Debt

The effective rate that a company pays on its current debt, which can include loans, bonds, and any other interest-bearing liabilities.

Market Risk Premium

The extra return expected by investors for holding a risky market portfolio instead of risk-free assets, reflecting the additional risk.