CFA Practice Question

There are 208 practice questions for this study session.

CFA Practice Question

The presence of serially correlated errors can indicate that

I. something systematic has been omitted from the model.
II. an incorrect functional form has been estimated.
III. an important explanatory variable has been omitted.
Correct Answer: I, II and III

The error term represents a summary of a large number of random factors that enter the relationship under study but are not measurable or have been omitted from the model for some reason.

User Contributed Comments 0

You need to log in first to add your comment.