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Basic Question 9 of 15

Consider the following statements relating to the slope of a regression equation.

I. If the variables are positively correlated, the slope of the regression line will be positive.
II. If the variables are negatively correlated, the slope of the regression line will be negative.
III. If the variables are uncorrelated, the regression line will have a slope of 0.

Which statement(s) is (are) TRUE?

User Contributed Comments 3

User Comment
arudkov is there gonna be a @line@ with no correlation for III?
ybavly @ arudkov: I think there would be a line.

QUESTION: if there is no correlation there could be any number of slopes... not necessarily 0, correct?
Teeto If there is no corellation (linear relationship) then it is not possible to explain Y using X.
The best guess for Y would be it's average value. So YBar=b0=AVG(Y), no slope and no X in the equation.
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Lina

Lina

Learning Outcome Statements

describe a simple linear regression model, how the least squares criterion is used to estimate regression coefficients, and the interpretation of these coefficients

CFA® 2025 Level I Curriculum, Volume 1, Module 10.