Regression Analysis Involves

question 68

Multiple Choice

Regression analysis involves:

• A) Creating a graph that shows changes across time
• B) Creating a test where people do not regress toward the mean
• C) A statistical procedure used to predict or explain the values of a dependent variable based on the values of one or more independent variables
• D) A statistical procedure for analyzing contingency table

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Definitions:

Superior Returns

Returns that exceed the performance of a benchmark index or the average returns of a particular investment category.

Neglected-firm Effect

A theory suggesting that lesser-known, smaller companies can provide higher returns than their larger counterparts due to lack of analyst coverage.

Excess Returns

Returns on an investment that exceed a benchmark or average return, indicating higher-than-expected performance.

Abnormal Returns

Returns on a security or portfolio that exceed what is predicted by market models, such as the CAPM, indicating outperformance.