- CFA Exams
- CFA Exam: Level II 2021
- Study Session 2. Quantitative Methods (1)
- Reading 5. Multiple Regression
- Subject 15. Models with qualitative dependent variables

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**CFA Practice Question**

Which of the following statements is (are) false concerning logit models? Choose the best answer.

B. The output of a logit model will be a Chi-squared random variable with k degrees of freedom.

C. Logit models gained popularity when computing power was expensive.

A. Logit models are based on the logistic distribution. They are utilized for regressions featuring a qualitative dependent variable.

B. The output of a logit model will be a Chi-squared random variable with k degrees of freedom.

C. Logit models gained popularity when computing power was expensive.

Correct Answer: B

The output of a logit model will not be a Chi-squared random variable with k degrees of freedom. Rather, the output of a logit model will be a simple probability bound by zero and one, respectively.

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**User Contributed Comments**
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User |
Comment |
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danlan2 |
Understand the features of logit models. |