Select one: A. You are running a regression of Y = a + BX1 + yX1 x2 + You estimate a to be positive, ß to be positive, and y to be negative. As a result, the impact of X1 on Y will be weakened by X2. O B. According to the agency theory, the agency problem is more significant for firms with a higher level of free cash flows. O C.f volatility of the underlying asset increases, it will increase the value of a call option but will decrease the value of a put option. O D. Anchoring bias indicates that people tend to stay with the default option.
Select one: A. You are running a regression of Y = a + BX1 + yX1 x2 + You estimate a to be positive, ß to be positive, and y to be negative. As a result, the impact of X1 on Y will be weakened by X2. O B. According to the agency theory, the agency problem is more significant for firms with a higher level of free cash flows. O C.f volatility of the underlying asset increases, it will increase the value of a call option but will decrease the value of a put option. O D. Anchoring bias indicates that people tend to stay with the default option.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:14 Which statement below is incorrect?
Select one:
You are running a regression of
Y = a + BX1 + yX1 x2 + e
You estimate a to be positive, B to be positive, and y to be negative. As a result, the impact
of X1 on Y will be weakened by X2.
O B. According to the agency theory, the agency problem is more significant for firms with a
higher level of free cash flows.
O C.if volatility of the underlying asset increases, it will increase the value of a call option but
will decrease the value of a put option.
D. Anchoring bias indicates that people tend to stay with the default option.
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