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9 questions · 1 formulas
Information criteria
Lower AIC / SC (BIC) → preferred model
Model Fit & RMSED–A levelVery high priorityEstimate following model using the data br5 (sheet “br5” in the Excel file “exam_data_AI2152.xlsx”). Use all 900 observations to estimate the regression model: The estimated coefficient of the variable Pool is closest to_________
→ C) 0.0704
Old Exam — Oct 2023, Q9
Given: Historical software-dependent regression. Current adaptation: if a regression output is given, read the POOL coefficient directly and interpret it based on model form.
- A) 0.0572
- B) 0.0043
- C) 0.0704
- D) 0.1267
- E) None of the above (A, B, C, D) is close to be correct.
Current exam rule: prediction uses the stated fitted equation; lower RMSE/AIC/SC is preferred when the criterion is being minimized; hold-out data must remain outside estimation/selection. Source answer: C) 0.0704.
Rule: The old exam supplied a spreadsheet/software. For the 2026 paper exam, expect the necessary values/table/output to be printed. Use the method, not the historical data file.
Model Fit & RMSED–A levelVery high priorityWhat is the Schwarz criterion (SC) for the model above (MCQ 9)? Use the formula The SC is closest to_________
→ A) ‒2.650
Old Exam — Oct 2023, Q10
Given: Historical model-selection calculation using Schwarz/BIC. Current concept: lower (more negative) SC/BIC is preferred.
- A) ‒2.650
- B) ‒2.930
- C) ‒4.650
- D) 2.930
- E) None of the above (A, B, C, D) is close to be correct.
Current exam rule: prediction uses the stated fitted equation; lower RMSE/AIC/SC is preferred when the criterion is being minimized; hold-out data must remain outside estimation/selection. Source answer: A) ‒2.650.
Rule: The old exam supplied a spreadsheet/software. For the 2026 paper exam, expect the necessary values/table/output to be printed. Use the method, not the historical data file.
Model Fit & RMSED–A levelVery high priorityIn the original exam, the model was estimated using a supplied dataset.xlsx”). However this time use the first 850 observations to estimate the regression model: You want to compute the hold-out RMSE for the last 50 observations. The hold-out RMSE is closest to_______.
→ D) 0.2798
Old Exam — Oct 2023, Q11
Given: Historical hold-out RMSE calculation. Current concept: estimate on training sample only, predict test sample, RMSE=sqrt(mean squared prediction error).
- A) 3.9149
- B) 0.0783
- C) 0.2852
- D) 0.2798
- E) None of the above (A, B, C, D) is close to be correct.
Current exam rule: prediction uses the stated fitted equation; lower RMSE/AIC/SC is preferred when the criterion is being minimized; hold-out data must remain outside estimation/selection. Source answer: D) 0.2798.
Rule: The old exam supplied a spreadsheet/software. For the 2026 paper exam, expect the necessary values/table/output to be printed. Use the method, not the historical data file.
Model Fit & RMSED–A levelVery high priorityUsing the above model, predict the prices of a house with 2500 square feet that is not close to the university. Use the natural predictor (not the corrected predictor). The predicted price is closest to
→ B) $212 021
Old Exam — Dec 2022, Q23
Given: Historical software-dependent prediction question. Original model: ln(PRICE)=b0+b1 ln(SQFT)+d1 CLOSE+d2[CLOSE x ln(SQFT)].
- A) $207 479
- B) $212 021
- C) $218 756
- D) $225 335
- E) None of the above (A, B, C, D) is close to be correct.
Current exam rule: prediction uses the stated fitted equation; lower RMSE/AIC/SC is preferred when the criterion is being minimized; hold-out data must remain outside estimation/selection. Source answer: B) $212 021.
Rule: The old exam supplied a spreadsheet/software. For the 2026 paper exam, expect the necessary values/table/output to be printed. Use the method, not the historical data file.
Model Fit & RMSED–A levelVery high priorityUsing the above model, predict the prices of a house with 2500 square feet that is close to the university. Use the natural predictor (not the corrected predictor). The predicted price is closest to
→ C) $303 169
Old Exam — Dec 2022, Q24
Given: Same historical prediction model as Q23, but CLOSE=1.
- A) $228 665
- B) $282 742
- C) $303 169
- D) $315 158
- E) None of the above (A, B, C, D) is close to be correct.
Current exam rule: prediction uses the stated fitted equation; lower RMSE/AIC/SC is preferred when the criterion is being minimized; hold-out data must remain outside estimation/selection. Source answer: C) $303 169.
Rule: The old exam supplied a spreadsheet/software. For the 2026 paper exam, expect the necessary values/table/output to be printed. Use the method, not the historical data file.
Model Fit & RMSED–A levelVery high priorityUsing the above model, predict the prices of a house with 2500 square feet that is not close to the university. Use the natural predictor (not the corrected predictor). The predicted price is closest to
→ A) $207 479
Old Exam — Oct 2022, Q17
Given: Historical software-dependent prediction; keep the log-model prediction concept, not the original spreadsheet mechanics.
- A) $207 479
- B) $185 650
- C) $218 756
- D) $204 454
- E) None of the above (A, B, C, D) is close to be correct.
Current exam rule: prediction uses the stated fitted equation; lower RMSE/AIC/SC is preferred when the criterion is being minimized; hold-out data must remain outside estimation/selection. Source answer: A) $207 479.
Rule: The old exam supplied a spreadsheet/software. For the 2026 paper exam, expect the necessary values/table/output to be printed. Use the method, not the historical data file.
Model Fit & RMSED–A levelVery high priorityUsing the above model, predict the prices of a house with 2500 square feet that is close to the university. Use the natural predictor (not the corrected predictor). The predicted price is closest to
→ B) $282 742
Old Exam — Oct 2022, Q18
Given: Same as Q17 but dummy CLOSE=1.
- A) $228 665
- B) $282 742
- C) $235 545
- D) $265 350
- E) None of the above (A, B, C, D) is close to be correct.
Current exam rule: prediction uses the stated fitted equation; lower RMSE/AIC/SC is preferred when the criterion is being minimized; hold-out data must remain outside estimation/selection. Source answer: B) $282 742.
Rule: The old exam supplied a spreadsheet/software. For the 2026 paper exam, expect the necessary values/table/output to be printed. Use the method, not the historical data file.
Model Fit & RMSED–A levelVery high priorityWhich model should you choose based on the AIC criteria?
→ D) Model 4.
Old Exam — Oct 2021, Q14
- A) Model 1.
- B) Model 2.
- C) Model 3.
- D) Model 4.
- E) None of the above (A, B, C, D) is correct.
AIC: lower is better. The smallest value is -4.42 for Model 4 -> D.
Rule: Training data estimates/selects; hold-out data evaluates. Lower RMSE = better prediction.
Bonds & Cap RatesE-levelVery high priorityStarting from Cap Rate = Government Bond Yield + Spread, which rearrangement correctly derives the cap rate spread?
→ A) Spread = Cap Rate − Government Bond Yield
Computer Lab 4 — Exercise 1, Task 7
- A) Spread = Cap Rate − Government Bond Yield
- B) Spread = Cap Rate + Government Bond Yield
- C) Spread = Government Bond Yield − Cap Rate
- D) Spread = Cap Rate × Government Bond Yield
Simple algebra: subtract Government Bond Yield from both sides of Cap Rate = Government Bond Yield + Spread.
Rule: Always isolate the unknown term via basic algebraic rearrangement.