Why should I choose AnalystNotes?

AnalystNotes specializes in helping candidates pass. Period.

Find out more
Subject 3. The Use of Multiple Regression for Forecasting PDF Download

Predicting the value of the dependent variable using an estimated multiple regression model is similar to that in simple regression. First, sum, for each independent variable, the estimated slope coefficient multiplied by the assumed value of that variable, and then add the estimated intercept coefficient.

Example

A multiple regression analysis yields the equation y-hatt = -3.8 + 2.34 X1t + 7.52 X2t. If

  • The value of the X1t independent variable is 6, and
  • The value of the X2t independent variable is 2.

What is the predicted value of the dependent variable?

Answer: The predicted value of the dependent variable is -3.8 + 2.34 x 6 + 7.52 x 2 = -3.8 + 14.04 + 15.04 = 25.28.

User Contributed Comments 3

User Comment
pb09 I wish the rest of quant was this easy!
zed889 amen
Cfrey Glad AN has the bookmark feature
You need to log in first to add your comment.
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach

Andrea Schildbach

My Own Flashcard

No flashcard found. Add a private flashcard for the subject.

Add

Actions