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Basic Question 4 of 4
Consider the following multiple regression results of the return on capital (ROC) on performance measures (profit margin (%), sales, and debt ratio).
Given that sales = 1000, debt ratio = 20, and profit margin = 20%, the predicted value of the return on capital (ROC) according to the regression model is closest to:
A. 7.38%
B. 8.29%
C. 16.03%
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I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
calculate and interpret a predicted value for the dependent variable, given the estimated regression model and assumed values for the independent variable.
CFA® 2025 Level II Curriculum, Volume 1, Module 2.