The Degrees of Freedom Associated with the Regression Sum of Squares

question 40

Multiple Choice

The degrees of freedom associated with the regression sum of squares equals ________.

• A)the number of independent variables
• B)1
• C)the F-ratio
• D)(n − 2)

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Definitions:

Duration

A measure of the sensitivity of a bond's or fixed income portfolio's price to changes in interest rates, typically expressed in years.

Basis Points

A unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument, equal to 1/100th of 1%.

Yield To Maturity

The total return anticipated on a bond if held until its maturity date, factoring in its current market price, face value, interest rate, and time to maturity.

Perpetuity

A type of financial instrument that offers indefinite or endless payments to the holder, often used to represent the value of fixed interest stocks.