IFE Quiz

What is the formula for simple linear regression?

• y=PX+Q

• y=AX+B

• y=MX+C

• y=RX+S

What is the purpose of correlation?

• Predicts the value of the dependent variable

• Models the relationship between variables

• None of the above

• Measures the strength and direction of a linear relationship

What does the least squares approach aim to minimize?

• Sum of squared discrepancies between observed and anticipated values

• Sum of absolute differences between observed and anticipated values

• Sum of absolute errors between observed and anticipated values

• Sum of squared errors between observed and anticipated values

What property does an efficient estimator possess?

• Largest possible variance among a class of unbiased estimators

• Equal variance to all other estimators

• None of the above

• Smallest possible variance among a class of unbiased estimators

What is the notation for the correlation coefficient?

• γ

• r

• α

• β

What assumption is made about the relationship between the dependent and independent variables in OLS?

• Independence

• Linearity

• Normality of Residuals

• Homoscedasticity

What is the purpose of regression analysis?

• None of the above

• Predict the value of the dependent variable

• Measure the strength and direction of a linear relationship

• Model the relationship between a dependent variable and independent variables

What does an unbiased estimator provide estimates that are equal to?

• Double the true value of the parameter

• True value of the parameter

• Half the true value of the parameter

• None of the above

Which of the following is a typical characteristic of financial asset return time-series?

• Intercept
  Their distributions are fat-tailed

• They are stationary

• They are highly autocorrelated

• They have no trend

What property does a good estimator possess according to the BLUE criteria?

• Optimal among biased estimators

• Optimal among the class of linear unbiased estimators

• Optimal among all estimators

• None of the above