CFA Practice Question

There are 155 practice questions for this study session.

CFA Practice Question

If you find two variables that are highly correlated in a simulation model, you should ______.

I. pick the variable that has a smaller impact on value.
II. build the correlation explicitly into the simulation process.
III. drop the two variables as they are correlated and thus biased.
Correct Answer: II

I is incorrect; you should focus on the variable that has the bigger impact on value.

User Contributed Comments 0

You need to log in first to add your comment.