CFA Practice Question

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CFA Practice Question

Which of the following statements is (are) true?

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

Error terms is just another name for residuals.
The degrees of freedom should be t - k - 1.

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