Question #54 - Reading 1 Multiple Regression

Reading: Reading 1 Multiple Regression

PDF File: Reading 1 Multiple Regression.pdf

Page: 24

Status: Unattempted

Correct Answer: A

Shared Context

- What is the correct interpretation of the coefficient of closed in the first regression? A) If a model is closed to new investors, the expected excess fund return is 1.65%. B) A closed fund is likely to generate a return of 1.65%. C) A closed fund is estimated to have an extra return of 1.65% relative to funds that are not closed.

Question

To check for only the outliers in the sample, Lee should most appropriately use:

Answer Choices:

A. Studentized residuals

B. leverage

C. Cook’s D

Explanation

Studentized residuals are used to identify outliers (in the dependent variable). Leverage is used to identify high-leverage observations (in the independent variable), while Cook's D is a composite measure (combines both independent and dependent variables) to identify influential observations.

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