- 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
To find the regression line that best fits the observations, we try to find the estimated intercept and slope so that:
A. the sum of the squared residuals is minimized.
B. the expected value of the residual term is zero.
C. the sum of the squared residuals is zero.
Explanation: B: The lease squared fitting of a regression line will result in a zero expected value of residual term.
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