- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 5. Multiple Regression
- Subject 10. Heteroskedasticity

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**CFA Practice Question**

If the variance of the errors differs across observations, the regression is said to exhibit ______.

A. Serial correlation.

B. Heteroscedasticity.

C. Multicollinearity.

**Explanation:**If the error terms do not have equal variances, they are said to be heteroscedastic, from two Greek words meaning "having different spreads".

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**User Contributed Comments**
2

User |
Comment |
---|---|

murli |
Median not affected by chang in value, unless the sequence of location of variables is changed! |

iroy |
In this case the sequence is unchanged since it is the highest score which is increased. |