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Basic Question 1 of 3
One model specification principle that is the opposite of data mining is:
B. The model should be grounded in cogent economic reasoning.
C. The functional form chosen for the variables in the regression should be appropriate given the nature of the variables.
A. The model should be parsimonious.
B. The model should be grounded in cogent economic reasoning.
C. The functional form chosen for the variables in the regression should be appropriate given the nature of the variables.
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Learning Outcome Statements
explain the types of heteroskedasticity and how it affects statistical inference;
CFA® 2026 Level II Curriculum, Volume 1, Module 3.