Which of the Following Is a Method to Correct for Sample

question 23

Multiple Choice

Which of the following is a method to correct for sample selection bias for the problem of incidental truncation?

• A)Vector error correction method
• B)First differencing method
• C)Heckman's method
• D)Johansen method

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Definitions:

NPV Projects

Projects that are evaluated based on the Net Present Value method, which calculates the present value of future cash flows minus the initial investment cost.

Debt/Equity Ratio

The ratio that highlights the proportional use of debt and shareholders' equity in asset financing for a company.

Stripped Common Shares

Common stock on which dividends and capital gains are repackaged and sold separately.

Dividends

Payments made by a corporation to its shareholders, usually derived from the company's profits, as a reward for investing in the company's equity.