Under What Circumstances Does the Variance Inflation Factor Signal That

question 25

Multiple Choice

Under what circumstances does the variance inflation factor signal that multicollinearity may be a problem?

• A) When the value of VIF exceeds the size of the sample from which the regression model was developed
• B) When the VIF value is approximately 1.0
• C) When the VIF is greater than or equal to 5
• D) When the VIF is a negative value

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Definitions:

Recognized

Acknowledged or understood, often referring to income, gains, or losses for tax purposes.

Distribution

Withdrawals or payouts from investments, retirement accounts, or revenue from a business that may be taxable.

Current Cash Distribution

In investments, it refers to the actual cash distributed to investors or partners from the operations of a business, fund, or another form of investment.

Partnership Interest

An owner's share of the profits and losses, and rights and obligations, in a partnership.