For questions 20-21 use the following R output from a ARMA(1,2)-GARCH(1,1):    

Which of the following best describes the difference between the ARCH(q) and GARCH(p, q) models? 

Which of the following is a limitation of ARCH models (select all correct responses):  

The ARCH model assumes positive and negative shocks have the same effect on volatility because it depends on the log of the previous shocks 

We have a GARCH model that can be expressed as

You want to predict GDP growth using both past values of the GDP time series itself and external factors like interest rates. Which time series model would be the best choice for the GDP series? 

MAE 242, 74299, Fall 2024, Midterm 3-2.pdf

Let’s assume events A and B are dependent. If P(A)=0.6 and P( A and B)=0.4, find P(B|A)   Round to three decimal places

In the reading, “What educated citizens should know about statistics and probability”, Utts argues that several statistical concepts are commonly misunderstood by both the public and even researchers themselves. Choose one of the seven topics mentioned in the article that the author identifies as a source of confusion and describe it in your own words. Then, discuss a potential consequence of this misunderstanding (within a specific scientific discipline or society more broadly). How might scientists (and lifelong students of science like you) be able to reduce misunderstandings of the topic you chose? 

Tonya knows that people seeing the billboard advertising her real estate firm will be busy driving or talking or otherwise be distracted. Instead of outlining thoughtful reasons for why people should call her firm, she decides to limit the billboard to a picture of a beautiful house with an attractive, happy family standing out front. In the terminology of researchers Petty and Cacioppo, which route will the information on the billboard target?