Error Term in Investment Formulas

Error Term represents the difference between the observed values of the dependent variable and the values predicted by the regression model. And is denoted by E_i.

Investment formulas that make use of Error Term

fxFama-French Three-Factor ModelGo

FAQ

What is the Error Term?

Error Term represents the difference between the observed values of the dependent variable and the values predicted by the regression model.

Can the Error Term be negative?

{YesorNo}, the Error Term, measured in {OutputVariableMeasurementName} {CanorCannot} be negative.

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