Browse CFA Level 2

Chapter 10: Nonlinear and Advanced Regression Methods

In this section

  • Polynomial, Interaction, and Step Functions
    Deepen your understanding of polynomial regression, interaction terms, and step functions. Learn how to capture nonlinear relationships, interpret model coefficients, and avoid overfitting in a CFA® Level II context.
  • Probit and Other Nonlinear Models
    Explore Probit regression and other nonlinear models for binary or limited-dependent variables, including Tobit, Heckman, and logistic approaches, with practical finance applications.
  • Time‑Varying Coefficients and Regime‑Switching Regressions
    Discover how to handle evolving relationships and structural shifts in financial markets using time‑varying parameter models and regime‑switching techniques.
  • Mixed Models and Hierarchical Structures
    Explore how mixed (multilevel) models handle nested investment data, combining fixed and random effects for robust financial insights.
  • Vignette Scenarios with Nonlinear Applications
    Explore advanced nonlinear regression frameworks—such as logistic, probit, polynomial, and piecewise models—through realistic CFA® 2025 Level II vignettes. Understand how to interpret model outputs, handle threshold effects, and implement regime-switching strategies to enhance portfolio decision-making.
Friday, April 11, 2025 Monday, January 1, 1

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