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Basic Question 1 of 3

One model specification principle that is the opposite of data mining is:

A. The model should be parsimonious.
B. The model should be grounded in cogent economic reasoning.
C. The functional form chosen for the variables in the regression should be appropriate given the nature of the variables.

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I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu

Edward Liu

Learning Outcome Statements

describe how model misspecification affects the results of a regression analysis and how to avoid common forms of misspecification;

CFA® 2024 Level II Curriculum, Volume 1, Module 3.