- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 4. Introduction to Linear Regression
- Subject 3. The standard error of estimate and the coefficient of determination
CFA Practice Question
If the coefficient of correlation equals 0.61, it indicates that the proportion of the variation in the dependent variable explained by the variation in the independent variable is
A. 37%
B. 61%
C. 98%
Explanation: 0.61 x 0.61 = 37%.
User Contributed Comments 3
User | Comment |
---|---|
shiva5555 | wtf? is the coefficient already squared? |
MathewBinu | In models with one only indepedent variable, the coeffiecent of determination(R^2) can be calculated simply as equals r^2 (correlation coefficent. The question is the definition of R^2. |
jonan616 | coefficient of correlation = r coefficient of determination = r^2 |