- CFA Exams
- CFA Exam: Level II 2021
- Study Session 2. Quantitative Methods (1)
- Reading 4. Introduction to Linear Regression
- Subject 1. Linear regression

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**CFA Practice Question**

If you run linear regression on a set x-y data and obtain the results shown below then the predicted y-value for x = 60 is ______.

B. 51.01

C. 124.81

A. 58.92

B. 51.01

C. 124.81

Correct Answer: B

The linear regression equation (prediction equation) is y = -1.23x + 124.81. So, the predicted value of x = 60 is y = -1.23(60) + 124.81 or y = 51.01

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**User Contributed Comments**
1

User |
Comment |
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charomano |
Just to confirm the value of the y-intercept: b = Yave + a*Xave = 58.92 - (-1.23)(53.57) = 124.81 |