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Chartered Financial Analyst Level 2

Chartered Financial Analyst Level 2

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An analyst builds the following multiple regression model for a company's P/E ratio:

Coefficient

  • Intercept: 2.8
  • Factor 1: 1.8
  • Factor 2: -0.4

If Factor 1 and Factor 2 are assumed to be 12.5 and 5.3, respectively, the predicted P/E ratio is closest to:

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