Question

Question:(2O marks)

a) List four things Financial Econometrics can be useful for

b) Distinguish between continuous data and discrete data

c)State the steps involved in formulating and econometrics models

d)State any five points to consider when reading articles in emphirical Finance

e) Distinguish between time series data and panel data

Answer 1

(a) Financial Econometrics: in simplest words, Financial Econometrics refers to dealing with quantitative problems arising from finance. Financial econometrics is a branch of financial economics.

(b) Difference between Continuous Data and Discrete Data

• Continuous Data is measured i.e. a person's height, weight etc. wherein Discrete Data is counted i.e. result of rolling a dice, number of person in a queue etc
• Continuous Data is mutually exclusive wherein Discrete data is mutually inclusive.
• The Graphical representation of continuos data is Histogram wherein the graphical representation of Discrete data is Bar Charts.