- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 3. Model Misspecification
- Subject 1. Model Misspecification
CFA Practice Question
Each variable included in a regression should play an essential role. This is equivalent to saying:
B. The model should be grounded in cogent economic reasoning.
C. The model cannot violate any regression assumptions.
A. The model should be parsimonious.
B. The model should be grounded in cogent economic reasoning.
C. The model cannot violate any regression assumptions.
Correct Answer: A
Here "parsimonious" means accomplishing a lot with a little.
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