- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 5. Multiple Regression
- Subject 1. Multiple Linear Regression

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**CFA Practice Question**

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

II. Y

III. Y

I. Y

_{t}= b_{0}+ b_{1}X_{1t}+ b_{2}X_{2t}+ e_{t}.II. Y

_{t}= b_{0}+ b_{1}X_{1t}+ e_{t}.III. Y

_{t}= b_{0}+ b_{1}X_{1t}+ b_{2}e^{(X2t)}+ e_{t}.Correct Answer: I only

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

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**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? |