CFA Practice Question

There are 208 practice questions for this study session.

CFA Practice Question

Forecasters use regression to predict the volume of timber in a tree using easily measured quantities such as diameter. Let y be the volume of timber in cubic feet and x be the diameter in feet (measured at 3 feet above ground level). One set of data gives:

The predicted volume for a tree of diameter = 18 inches is:

A. 1050 cubic feet.
B. 90 cubic feet.
C. 60 cubic feet.
Correct Answer: C

The prediction equation multiplies the value of x = 1.5 feet by 60 and then adds the intercept which is -30 cubic feet.

User Contributed Comments 8

User Comment
z2274743 Are people in every country outside the US supposed to know that 18 inches is 1.5 feet?
Janey I hope not
Leese And for those who use the metric system?
Tukker inch = 2,54 cm
foot = 30,48 cm
shiva5555 America is the only country that matters. Get used to it, you whiners.
charomano CFA will consider differences among countries, so no worries
IdAlmalki If x=1.5, then the equation should be as followed:
y = 30 + 60*1.5 = 120 .. why the answer is "B"
davidt876 you left off the negative sign in front of the 30
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