- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 5. Multiple Regression
- Subject 11. Serial Correlation
CFA Practice Question
There are two remedial steps to correct for serial correlation. Select them from the list.
II. adjust the standard errors of the estimated parameters.
III. adjust the r-squared.
IV. adjust the estimated parameters.
I. adjust the t-statistics of the estimated parameters.
II. adjust the standard errors of the estimated parameters.
III. adjust the r-squared.
IV. adjust the estimated parameters.
A. I and II
B. II and III
C. II and IV
Explanation: II is also known as computing robust standard errors. Modifying the regression equation to eliminate serial correlation (IV) is an alternative but not recommended by the textbook.
User Contributed Comments 1
| User | Comment |
|---|---|
| Allstats | If it is not recommended by the textbook, how are we supposed to get it right? |