PRMIA Exam 8007 Topic 3 Question 82 Discussion

Actual exam question for PRMIA's 8007 exam

Question #: 82
Topic #: 3

Which of the following is not a direct cause of autocorrelation or heteroskedasticity in the residuals of a regression model?

AA structural break in the dependent variable

BA high positive correlation between two explanatory variables

CThe omission of a relevant explanatory variable

DUsing an inappropriate functional form in the model

Show Suggested Answer

Suggested Answer: B

by Cornell at Sep 14, 2024, 08:16 PM

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Grover

3 months ago

Autocorrelation, heteroskedasticity... Sounds like a bunch of fancy stats jargon to me. I just want to know which answer will get me the most points on the test!

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Laquanda

2 months ago

D) Using an inappropriate functional form in the model

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Dahlia

2 months ago

C) The omission of a relevant explanatory variable

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Rochell

2 months ago

B) A high positive correlation between two explanatory variables

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Frederic

3 months ago

I'm going with A. A structural break in the dependent variable is unlikely to be a direct cause of these statistical problems.

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Haydee

3 months ago

Hmm, I'm not sure about this one. Maybe C? Omitting a relevant variable could cause all sorts of problems.

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Gerardo

1 months ago

User 3: I'm not so sure, I think it might be D. Using an inappropriate functional form could also lead to problems.

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Han

2 months ago

User 2: I agree, that seems like a plausible explanation.

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Abraham

2 months ago

User 1: I think it could be C, omitting a relevant variable sounds like it could cause issues.

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Edelmira

3 months ago

Hmm, that's a good point. It could definitely lead to autocorrelation or heteroskedasticity in the residuals.

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Paris

3 months ago

I disagree, I believe it is D) Using an inappropriate functional form in the model.

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Ressie

3 months ago

D seems like the correct answer to me. Using an inappropriate functional form can definitely lead to these issues.

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Loreen

2 months ago

Agreed, it's important to choose the right functional form in regression models.

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Beth

2 months ago

Yeah, using an inappropriate functional form can cause problems.

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Meaghan

3 months ago

I think D is the correct answer too.

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Edelmira

4 months ago

I think the answer is B) A high positive correlation between two explanatory variables.

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Lonna

4 months ago

I think the answer is B. A high positive correlation between two explanatory variables doesn't cause autocorrelation or heteroskedasticity.

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Royal

2 months ago

You're welcome!

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Laquita

2 months ago

Oh, I see. Thanks for clarifying.

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Yvonne

3 months ago

No, it's actually D. Using an inappropriate functional form can cause those issues.

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Shawn

3 months ago

I think the answer is B.

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