- CFA Exams
- 2025 Level II
- Topic 1. Quantitative Methods
- Learning Module 2. Evaluating Regression Model Fit and Interpreting Model Results
- Subject 3. The Use of Multiple Regression for Forecasting
Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Subject 3. The Use of Multiple Regression for Forecasting PDF Download
Predicting the value of the dependent variable using an estimated multiple regression model is similar to that in simple regression. First, sum, for each independent variable, the estimated slope coefficient multiplied by the assumed value of that variable, and then add the estimated intercept coefficient.
Example
A multiple regression analysis yields the equation y-hatt = -3.8 + 2.34 X1t + 7.52 X2t. If
- The value of the X1t independent variable is 6, and
- The value of the X2t independent variable is 2.
What is the predicted value of the dependent variable?
Answer: The predicted value of the dependent variable is -3.8 + 2.34 x 6 + 7.52 x 2 = -3.8 + 14.04 + 15.04 = 25.28.
User Contributed Comments 3
| User | Comment |
|---|---|
| pb09 | I wish the rest of quant was this easy! |
| zed889 | amen |
| Cfrey | Glad AN has the bookmark feature |
I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
My Own Flashcard
No flashcard found. Add a private flashcard for the subject.
Add