CFA Practice Question

There are 208 practice questions for this study session.

CFA Practice Question

Which of the following is (are) assumptions of a linear regression?

I. For every given value of the independent variable, the dependent variable is normally distributed.
II. The errors are normally distributed with mean zero.
III. The errors are statistically uncorrelated.
A. II and III
B. I and III
C. I, II and III
Explanation: For every given value of the independent variable, the error terms are normally distributed with mean zero, and the error terms are statistically uncorrelated.

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