CFA Practice Question

There are 208 practice questions for this study session.

CFA Practice Question

To correct for serial correlation, we should:

I. adjust the t-statistics of the estimated parameters.
II. adjust the standard errors of the estimated parameters.
III. adjust the r-squared.
IV. adjust the estimated parameters.
Correct Answer: II

We should directly adjust the standard errors of the estimated parameters to account for the serial correlation. This is also known as computing robust standard errors. Modifying the regression equation to eliminate serial correlation is not recommended.

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flora_oywj why I is not correct?
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