A Cross-Sectional Forecasting Model

question 20

Multiple Choice

A cross-sectional forecasting model

• A) uses intuition and does not consider statistical significance.
• B) uses estimated factor values to develop sensitivities.
• C) uses given sensitivities to estimate factor values.
• D) is confined to one time period.

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Definitions:

Linearly Related

A term describing two or more variables that change together in a way that can be represented with a straight line in a graph.

Spearman Rank Correlation

A statistic used to measure the strength and direction of association between two ranked variables.

Pearson Correlation

A measure of the linear correlation between two variables X and Y, giving a value between -1 and 1.

Positive Correlation

The relationship between two variables where both variables move in the same direction.