CFA Practice Question

There are 155 practice questions for this study session.

CFA Practice Question

Which error is irreducible?

A. bias error
B. variance error
C. base error
Correct Answer: C

Base error is the variance due to chance. It is not reducible. The other 2 are reducible.

The variance is how much that the estimate varies around its average.

Bias and variance together gives us prediction error.

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