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Basic Question 1 of 3

In the multiple regression model Yt = β0 + β1X1t + β2X2t + et, the term β0 represents ______, the term β1 represents ______, and the term et represents ______.

I. The Y-intercept.
II. The increase in Y with respect to a 1-unit change in X1.
III. The X-intercept.
IV. The increase in Y with respect to a 1-unit change in X2.
V. The error term.
VI. The exponential constant (2.718).
VII. The X-intercept.

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Learning Outcome Statements

describe the types of investment problems addressed by multiple linear regression and the regression process;

CFA® 2024 Level II Curriculum, Volume 1, Module 1.