[LEVEL II 模拟试题7] Mock Level II - Question 11-15 style, class, 模拟试题

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Question 11 - 8568

Henry Hilton, CFA, is undertaking an analysis of the bicycle industry. He hypothesizes that bicycle sales (SALES) are a function of three factors: the population under 20 (POP), the level of disposable income (INCOME), and the number of dollars spent on advertising (ADV). All data are measured in millions of units. Hilton gathers data for the last 20 years. Which of the follow regression equations correctly represents Hilton’s hypothesis?

A)	SALES = α x β1 POP x β2 INCOME x β3 ADV x ε.
B)	INCOME = α + β1 POP + β2 SALES + β3 ADV + ε.
C)	INCOME = α + β1 POP + β2 ADV + ε.
D)	SALES = α + β1 POP + β2 INCOME + β3 ADV + ε.

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Question 12 - 23289

The variance of the rates of return is 0.04 for stock X and 0.0144 for stock Y. The covariance between the returns of X and Y is 0.0096. The correlation of the rates of return between X and Y is:

A)	0.17.
B)	0.36.
C)	16.67.
D)	0.40.

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Question 13 - 8587

In a regression that does not include a lagged dependent variable as an independent variable, serial correlation is a problem because:

A)	the estimated coefficients are incorrect, but the standard errors are correct.
B)	it makes it difficult to interpret the meaning of a slope coefficient.
C)	it means that the estimated model is incorrect.
D)	the estimated coefficients are correct, but the standard errors are incorrect.

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Question 14 - 8581

Which of the following is NOT an assumption of linear regression? The:

A)	residuals are heteroskedastic.
B)	expected value of the residuals is zero.
C)	variance of the residuals is constant.
D)	residuals are independently distributed.

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Question 15 - 27257

The largest component of the costs to society of safety regulations in the workplace is the:

A)	cost of safety equipment.
B)	increased product prices from higher operating costs.
C)	costs of medical monitoring.
D)	operating budget of OSHA and costs of worker education.

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Question

11 - #8568

Your answer: B was incorrect. The correct answer was D) SALES = α + β₁ POP + β₂ INCOME + β₃ ADV + ε.

SALES is the dependent variable. POP, INCOME, and ADV should be the independent variables (on the right hand side) of the equation (in any order). Regression equations are additive.

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Question

12 - #23289

Your answer: D was correct!

r = Cov / (σ_xσ_y) = 0.0096 / [(√0.04) (√0.0144)] = 0.40

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Question

13 - #8587

Your answer: B was incorrect. The correct answer was D)

the estimated coefficients are correct, but the standard errors are incorrect.

As long as none of the independent variables are lagged dependent variables, the estimates of the coefficients will be correct. However, the standard errors will not be correct (they will be either too large or too small), thereby potentially leading to incorrect inferences.

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Question

14 - #8581

Your answer: B was incorrect. The correct answer was A)

residuals are heteroskedastic.

The assumptions regarding the residuals are that the residuals are homoskedastic, have a constant variance, have a mean of zero, and are independently distributed.

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Question

15 - #27257

Your answer: B was correct!

Safety regulations increase production costs as firms must adopt higher cost methods of manufacture. These costs are the largest component of the costs of safety regulation.