CFA Practice Question

There are 208 practice questions for this study session.

CFA Practice Question

For a data collection of x and y scores, if one data point is (30, 40) and the linear regression equation is y = -1.5x + 70 the residual for x = 30 is ______.

A. 30
B. 40
C. 15
Correct Answer: C

The residual for x = 30 is the observed value (40) minus the predicted value [y = -1.5(30) + 70 or y = 25]. Now, 40 - 25 = 15. So, the residual at x = 30 is 15.

User Contributed Comments 1

User Comment
danlan residual = real y-calculated y
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