finecono 1

What is financial econometrics?

• The study of financial markets using economic theories only.

• The application of econometric techniques to analyze financial data and markets.

• The practice of managing financial portfolios.

• The study of economic policies affecting finance.

Which of the following is an application of financial econometrics?

• Estimating the impact of fiscal policy on inflation.

• Forecasting stock price volatility using GARCH models.

• Analyzing consumer preferences for marketing purposes.

• Setting exchange rates for international trade.

What is high-frequency data in the context of stock market prices?

• Data measured at the end of each financial year.

• Data recorded every time there is a trade or a new quote.

• Data averaged over weekly trading sessions.

• Data collected only during market crashes.

What should you be cautious of when working with small samples in financial econometrics?

• They may not include all high-frequency trades.

• They may lead to biased or unreliable statistical results.

• They are too noisy to analyze.

• They are only useful for short-term predictions.

What is an essential consideration regarding the data used in finance research?

• Whether the data is old enough to show long-term trends.

• Whether the data comes from a reliable source and is of good quality.

• Whether the data includes only stock prices.

• Whether the data is free from seasonality.

What is a critical aspect of interpreting results in finance papers?

• Ensuring the results have been exaggerated to emphasize findings.

• Ensuring the results address the research questions posed by the authors.

• Ensuring the results are visually appealing

• Ensuring the results avoid controversial conclusions.

Why is a sample often used instead of the entire population?

• To avoid analyzing irrelevant data.

• Because analyzing the entire population may be infeasible or unnecessary.

• To ensure results are biased toward specific outcomes.

• To simplify statistical methods.

According to the Central Limit Theorem, what happens to the sample mean as sample size increases?

• It becomes equal to the population variance.

• It becomes distributed normally around the population mean.

• It becomes independent of the population data.

• It increases exponentially with the sample size.

Which of the following are the three main types of data used in econometric analysis?

• Historical data, simulation data, future data

• Time series data, cross-sectional data, panel data

• Quantitative data, qualitative data, mixed data

• Statistical data, financial data, experimental data