- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 10. Simple Linear Regression
- Subject 1. Estimation of the Simple Linear Regression Model
CFA Practice Question
Given the data {(1,5), (6, 15)}, the regression line is
B. y = (1/2)x + 10
C. y = 0.35x + 7
A. y = 2x + 3
B. y = (1/2)x + 10
C. y = 0.35x + 7
Correct Answer: A
Because there are only two data points, a straight line fits the data perfectly. For the two points, the slope is m = (15 - 5)/(6 - 1) = 2. Using the point-slope form we get: y - 5 = 2(x - 1) or y = 2x +3.
User Contributed Comments 1
| User | Comment |
|---|---|
| davcer | or simply substitute the values, (2*1)+3 =5 and (2*6)+3=15 |