Question 1 Describe briefly the three hypothesis testing procedures that are available under maximum likelihood estimation. Which...

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Economics

Question 1

  1. Describe briefly the three hypothesis testing procedures thatare available under maximum likelihood estimation. Which is likelyto be calculated in practice and why?  
  2. What stylized fact of financial data cannot be explained usinglinear trend models? ( 10 marks)
  3. Which of these features can be modelled using a GARCH (1,1)process? ( 10 marks)

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