- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 10. Simple Linear Regression
- Subject 1. Estimation of the Simple Linear Regression Model

###
**CFA Practice Question**

Which statement is false?

A. In simple linear regression, analysts try to observe the population parameter values b

_{0}and b_{1}.B. The regression equation does not require that every (X,Y) pair for an observation fall on the regression line.

C. The lower the standard error of the estimate, the better the regression.

**Explanation:**A is false. Only b hat

_{0}and b hat

_{1}can be observed to estimate b

_{0}and b

_{1}.

About C: The smaller the residual sum of squares, the better your model fits your data.

###
**User Contributed Comments**
0

You need to log in first to add your comment.