- 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
The sign of the correlation between dependent variable (Y) and independent variable (X) is determined by: A. the covariance of X and Y
B. the variable of X
C. the standard deviation of Y and X
Correct Answer: A
The correlation and slope formulas are quite similar. The sign of them are driven by the covariance of X and Y.
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