- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 10. Simple Linear Regression
- Subject 3. Analysis of Variance

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**CFA Practice Question**

If SSR is equal to the sum of squares total, it means:

A. all the points lie on the regression line.

B. the coefficient of determination is zero.

C. the regression model is perfect.

**Explanation:**Yes the model captures all the observed variability.

Note about A: if all the points lie on the regression line, the dependent variable can be predicted with 100% accuracy by using the regression line, and SSE will be zero. However, the opposite is not necessarily true.

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