- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 10. Simple Linear Regression
- Subject 5. Prediction Using Simple Linear Regression and Prediction Intervals
CFA Practice Question
You are given the following regression equation:
% Sales Growth = 6.253 + 0.7GDP
where Sb0 = 1.78, Sb1 = 0.21, and SEE = 2.79.
Which of the following best estimates the 95% confidence interval within which the population regression coefficient must fall within?
A. 0.29 - 1.11
B. 0.35 - 1.05
C. 0.61 - 0.84
Explanation: 95% confidence intervals = b1 ± 2Sb1 = 0.7 ± 1.96 (0.21)
User Contributed Comments 4
| User | Comment |
|---|---|
| dblueroom | is 90% 1.96 then? |
| malawyer | db, its two-tailed because it asks about a range not a point |
| kazec | Without knowing DOF, how do you get 1.96??? |
| dakota6789 | @kazec just a guess, but maybe there is enough GDP data that dof > 100, essentially a z-test |