(a) Explain the difference between a censored variable and a truncated variable as the terms are used in econometrics.

(b) Give examples from finance (other than those already described in this book) of situations where you might meet each of the types of variable described in part

(a) of this question.

(c) With reference to your examples in part (b), how would you go about specifying such models and estimating them?

AppendixLO1