- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 2. Multiple Regression
- Subject 4. The Standard Error of Estimate in Multiple Linear Regression Model

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**CFA Practice Question**

Which of the following statements is (are) true?

II. The standard error of estimate is equal to the standard error of the residual.

III. If there are k independent variables, and t observations, then the degrees of freedom associated with the residual is k - t - 1.

I. Error terms and residuals are the same concept.

II. The standard error of estimate is equal to the standard error of the residual.

III. If there are k independent variables, and t observations, then the degrees of freedom associated with the residual is k - t - 1.

Correct Answer: I and II

The degrees of freedom should be t - k - 1.

Error terms is just another name for residuals.

The degrees of freedom should be t - k - 1.

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