- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 4. Introduction to Linear Regression
- Subject 4. Confidence intervals for regression coefficients

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**CFA Practice Question**

You are given the following regression equation:

% Sales Growth = 6.253 + 0.7GDP

where S

_{b0}= 1.78, S_{b1}= 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 ± 2S

_{b1}= 0.7 ± 1.96 (0.21)

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**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 |