CFA Practice Question

There are 208 practice questions for this study session.

CFA Practice Question

Which of the following could be a multiple linear regression model?

I. Yt = b0 + b1 X1t + b2 X2t + et.
II. Yt = b0 + b1 X1t + et.
III. Yt = b0 + b1 X1t + b2 e(X2t) + et.
Correct Answer: I only

II is a linear model, but not a multiple linear model. III has an exponential component.

User Contributed Comments 3

User Comment
ericczhang Linear regressions only require that the parameters are linear, i.e. the b values are constant slopes that map the independent variables, which can be non-linear, onto the dependent variable.
davcer also II is not multiple
johangw Do b1 and b2 have to be linear? Or can it be like (b1)square in the multiple linear regression model?
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