In CFAI Book 3 page 161 In the middle of the page, there is an equation- % change in S&P Index Sales = -2.66 + 1.76 (% change in GDP) (.90)(1.55) I do not understand the derivation of it or the numbers in there. Can anybody explain?
If I remember correctly (haven’t looked at this since last year) that was just a regression equation, right? They were just using historical numbers to generate the equation and applying it going forward I think.
Looks regressiony to me.
It does. Similar problem showed up on PM exam last year also. I do not get the numbers though.