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A scatter diagram includes the following data points: Two regression models are proposed:
Model 1: y-hat = 1.85 + 2.40x.
Model 2: y-hat = 1.79 + 2.54x.
Using the least squares method, which of these regression models provides the better fit to the data? Why?
Defined Contribution
A type of retirement plan in which the amount contributed to the plan is specified, but the future benefit amount is not guaranteed, depending on investment returns.
Investment Performance
The measure of how an investment has grown or declined in value, considering both capital gains and income, over a specific period.
CFA
CFA stands for Chartered Financial Analyst, a professional designation given by the CFA Institute that measures the competence and integrity of financial analysts.
Financial Analysts Federation
An organization that represents the interests and professional development of financial analysts.
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