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Basic Question 2 of 3
Which of the following could be a multiple linear regression model?
II. Yt = b0 + b1 X1t + et.
III. Yt = b0 + b1 X1t + b2 e(X2t) + et.
I. Yt = b0 + b1 X1t + b2 X2t + et.
II. Yt = b0 + b1 X1t + et.
III. Yt = b0 + b1 X1t + b2 e(X2t) + et.
User Contributed Comments 3
| User | Comment |
|---|---|
| ericczhang | Linear regressions only require that the parameters are linear, i.e. the b values are constant slopes that map the independent variables, which can be non-linear, onto the dependent variable. |
| davcer | also II is not multiple |
| johangw | Do b1 and b2 have to be linear? Or can it be like (b1)square in the multiple linear regression model? |
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Colin Sampaleanu
Learning Outcome Statements
describe the types of investment problems addressed by multiple linear regression and the regression process;
CFA® 2025 Level II Curriculum, Volume 1, Module 1.