Which of the Following Statements Regarding Multicollinearity Is Not True

question 36

Multiple Choice

Which of the following statements regarding multicollinearity is not true?

• A) It exists in virtually all multiple regression models.
• B) It is also called collinearity and intercorrelation.
• C) It is a condition that exists when the independent variables are highly correlated with the dependent variable.
• D) It does not affect the F-test of the analysis of variance.
• E) It exists in virtually all multiple regression models and it is also called collinearity and intercorrelation.

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Definitions:

Capital Expenditure

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Revenue Expenditure

Expenses incurred by an organization in its day-to-day operations which do not add to the value of an asset.

Operating Costs

Expenses associated with the day-to-day functions of a business, excluding costs associated with production or acquisition of goods.

Depreciable Cost

Depreciable cost is the cost of a fixed asset that is subject to depreciation over its useful life, excluding salvage value.