Which of These Is a Viable Solution to the Problem

question 25

Multiple Choice

Which of these is a viable solution to the problem of multicollinearity?
(I) Ignore it
(II) Drop one of the collinear variables
(III) Transform the highly correlated variables into a ratio
(IV) Take the logs of the variables

• A) I only
• B) I and II only
• C) I, II and III only
• D) I, II, III and IV

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Definitions:

Margin Of Error

An expression of the amount of random sampling error in a survey's results, which indicates the range within which the true value lies with a certain degree of confidence.

Sample Standard Deviations

A measure of variability or dispersion within a sample dataset, estimating how much individual measurements in the sample differ from the sample mean.

Equal Sample Sizes

A condition in experimental design or analysis where all groups or conditions have the same number of observations.

Confidence Interval

A range of values, derived from a data set, that is likely to contain the value of an unknown population parameter with a certain degree of confidence.