- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 4. Introduction to Linear Regression
- Subject 3. The standard error of estimate and the coefficient of determination

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**CFA Practice Question**

If the correlation between age of an auto and money spent for repairs is +.90

A. 81% of the variation in the money spent for repairs is explained by the age of the auto

B. 81% of money spent for repairs is unexplained by the age of the auto

C. 90% of the money spent for repairs is explained by the age of the auto

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**User Contributed Comments**
4

User |
Comment |
---|---|

jpducros |
Explanation ? |

DaniD13 |
0.9^2 |

SMcalister |
but why not C? |

bsferas |
R2 = r2 |