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2018 Level 2 > Quant > Flashcards

Flashcards in Quant Deck (13):
1

FORMULA: t test using r and n

t = (r√(n-2)) / √(1-r^2 )

2

Y1 = b0 +b1*X1, which is dependent and which is independent variable?

Y is the dependent and X1 is the independent

3

Simple linear regression assumption: does a linear relationship exist btwn dep and ind. variable?

yes

4

Simple linear regression assumption: is the independent variable correlated or uncorrelated with the residuals?

uncorrelated

5

Simple linear regression assumption: is the independent or dependent variable uncorrelated with the residuals?

independent

6

Simple linear regression assumption: what is the expected value of the residual term?

zero

7

is the variance of the residuals term constant or nonconstant for all observations?

constant

8

are the residuals for one obversation to another correlated or not?

residual term is indepndently distirbution and they are not correlated

9

Simple linear regression assumption: is the residual term normally distributed or not?

normallay distributed

10

FORMULA: Confidence interval

predicted intercept + or - (tcritical * standard error)

11

FORMULA: t test given the intercept, stand error and a given level of signif

t = predicted intercept - given level of significance / stand. error

12

FORMULA: SEE

√(SSE )/(n-2)

13

FORMULA: R^2

RSS/ TSS or (TSS-SSE)/TSS because the R-sq represents what IS explained