- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 2. Multiple Regression
- Subject 5. Predicting the Dependent Variable in a Multiple Regression Model
CFA Practice Question
A multiple regression analysis yields the equation y-hatt = -7.35 + 3.82 X1t - 2.45 X2t. If
- The value of the X1t independent variable is 4.2, and
- The value of the X2t independent variable is 2.1.
What is the predicted value of the dependent variable?
A. 3.54
B. 13.84
C. 10.89
Explanation: The predicted value of the dependent variable is -7.35 + 3.82 x 4.2 - 2.45 x 2.1 = -7.35 + 16.04 - 5.15 = 3.54.
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