CFA Practice Question

There are 208 practice questions for this study session.

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".

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.
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