FRM一级易错题精选:When utilizing a proxy

When utilizing a proxy for one or more independent variables in a multiple regression model, which of the following errors is most likely to occur?

A. Model misspecification.

B. Heteroskedasticity.

C. Multicollinearity.

D. Serial correlation.

Answer:A

By using a proxy for an independent variable in a multiple regression analysis, there is some degree of error in the measurement of the variable.