CFA Practice Question

There are 208 practice questions for this study session.

CFA Practice Question

Given the following regression equation:

Growth in Sales = 6.253 + 0.7 GDP growth rate

Which of the following statements would be false?
A. Growth rate in sales is the dependent variable and the GDP rate is the independent variable.
B. If there is a recession, sales would only grow at 6.253%.
C. The regression coefficient is 0.7.
Explanation: If there was a recession, GDP growth rate would likely be a negative figure; thus it would be incorrect to assume that sales would grow at a rate indicated by its y-intercept.

User Contributed Comments 2

User Comment
jlai1990 This is incorrect. A regression would imply a negative GDP growth rate and thus growth in sales is less that 6.253%
jsc298 keyword here is false...
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