Extensions of Regression
Free CFA Level II lesson in Quantitative Methods. 12 min read, ~1,738 words.
Dummy variables: n categories require n - 1 dummies. The omitted category is the reference. Including n dummies + intercept = dummy variable trap (perfect multicollinearity). Logistic regression: log-odds = b0 + b1(X1) +.. Convert to probability: p = 1 / (1 + e^(-log-odds)). The log-odds is NOT the probability...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- extensions of regression
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