CFA level 2: Quantitative Methods 2020

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This channel is targeted at candidates for the CFA™ (Chartered Financial Analyst) Level 2 2020 exam.

In this video, we take a look at the concept of Multicollinearity.

Multicollinearity is when independent variables in a regression model are correlated.we are going to discuss the problems, testing regression model for it, and solution to solve multicollinearity.

Multicollinearity Issue: makes it hard to interpret your coefficients, and it reduces the power of your model to identify independent variables that are statistically significant


Multicollinearity Solution: Remove one independent variable at a time


Other CFA Level 2 Quantitative Methods Topics of interest:

Assumptions of Linear Regression :    • CFA Level 2: Quantitative Methods: As...  
Heteroskedasticity :    • CFA Level 2: Heteroskedasticity Simpl...  
Serial Correlation :    • CFA Level 2 : Serial correlation Simp...  
Quantitative Method Playlist:    • CFA Level 2 2020 :Quantitative Methods  

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