Which of the Following Is True

question 14

Multiple Choice

Which of the following is true?

• A)In ordinary least squares estimation, each observation is given a different weight.
• B)In weighted least squares estimation, each observation is given an identical weight.
• C)In weighted least squares estimation, less weight is given to observations with a higher error variance.
• D)In ordinary least squares estimation, less weight is given to observations with a lower error variance.

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Definitions:

Installment Note

A debt instrument that requires a series of payments over time until the total debt is paid off.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a predetermined price.

Bondholder's Risk

The risk faced by bond investors that the issuer may fail to make payments when due or violate terms of the bond agreement.

Carrying Value

The carrying value is the book value of assets and liabilities recorded on the balance sheet, calculated as the original cost minus any depreciation, amortization, or impairment costs.