The Formulae for the AIC and the BIC Are Different

question 37

Multiple Choice

The formulae for the AIC and the BIC are different. The

• A)AIC is preferred because it is easier to calculate
• B)BIC is preferred because it is a consistent estimator of the lag length
• C)difference is irrelevant in practice since both information criteria lead to the same conclusion
• D)AIC will typically underestimate p with non-zero probability

---

Definitions:

Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company’s earnings.

Liquidation

The process of winding up a company's financial affairs by selling off its assets to pay off debts.

Election

The process through which individuals select their leaders or decide on matters of public policy through voting in a democratic society.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities.