- CFA Exams
- CFA Exam: Level II 2021
- Study Session 2. Quantitative Methods (1)
- Reading 4. Introduction to Linear Regression
- Subject 3. The standard error of estimate and the coefficient of determination
CFA Practice Question
For a data collection of x and y scores, if the r-value is -0.8 then the percentage of variation in variable y due to variable x is ______.
B. -0.8%
C. -80%
A. 64%
B. -0.8%
C. -80%
Correct Answer: A
The percentage of variation in variable y due to variable x is r2. An r-value of -0.8 yields r2 = 0.64 or 64%. So, the percentage of variation in variable y due to variable x is 64%.
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