- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 10. Simple Linear Regression
- Subject 3. Analysis of Variance

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**CFA Practice Question**

In comparing the relation of percentage change in company sales with GDP growth, your regression software provides the following output:

Assuming that GDP next year is expected to decline by 3.2%, what is your best estimate for next years percentage change in sales?

A. 2.58%

B. 4.96%

C. 8.02%

**Explanation:**%ΔSales = 5.3 + 0.85 (%ΔGDP) = 5.3 + 0.85 (-3.2%) = 2.58%.

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