- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 7. Introduction to Linear Regression
- Subject 2. Estimating the Parameters of a Simple Linear Regression

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**CFA Practice Question**

A linear regression is ______ relationship.

A. a causal

B. an acausal

C. a functional

**Explanation:**It is important to remember that a regression equation does not imply a causal relationship between the dependent and the independent variables. It simply postulates a functional i.e., an associative relationship between them.

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**User Contributed Comments**
1

User |
Comment |
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StJohnDale |
functional relationship - associates 1 input with 1 output and I think a casual relationship merely refers to cause and effect relationship? |