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Basic Question 1 of 3
One model specification principle that is the opposite of data mining is:
B. The model should be grounded in cogent economic reasoning.
C. The functional form chosen for the variables in the regression should be appropriate given the nature of the variables.
A. The model should be parsimonious.
B. The model should be grounded in cogent economic reasoning.
C. The functional form chosen for the variables in the regression should be appropriate given the nature of the variables.
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Your review questions and global ranking system were so helpful.
Lina
Learning Outcome Statements
describe how model misspecification affects the results of a regression analysis and how to avoid common forms of misspecification;
CFA® 2024 Level II Curriculum, Volume 1, Module 3.