Page 36 - FINAL CFA II SLIDES JUNE 2019 DAY 2

LOS 8.i: Evaluate how well a regression READING 8: MULTIPLE REGRESSION AND ISSUES IN REGRESSION ANALYSIS
model explains the dependent variable by
analyzing the output of the regression MODULE 8.3: ANOVA AND THE F-TEST
equation and an ANOVA table.

ANOVA TABLES
Analysis of variance (ANOVA) is a statistical procedure that provides information on the explanatory power of a regression. The results
of the ANOVA procedure are presented in an ANOVA table, which accompanies the multiple regression results from a statistical analysis
or spreadsheet software program. An example of a generic ANOVA table is presented below:

The table is used to attribute the total variation of the dependent variable to one of two sources: the regression model or the residuals.
Table can be to calculate R , the F-statistic, and the standard error of estimate (SEE). That is:
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R , F, and SEE are provided along with the standard ANOVA table produced by most statistical software packages.

On the exam, be prepared to fill in “missing data” from an ANOVA output. Let’s look at an example …