Typical Symptoms of the Presence of Multicollinearity Include

question 60

Multiple Choice

Typical symptoms of the presence of multicollinearity include:

• A) the estimated regression coefficients to vary substantially from sample to sample ; this fact raises their standard errors; hence, theis unlikely to be greater than 2, or statistically significant
• B) the estimated regression coefficients change greatly in value as independent variables are dropped from or added to the regression equation
• C) the signs of the estimated regression coefficients are nonsensical; they are negative when common sense suggests positive signs and vice versa
• D) all of these and more
• E) none of these

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Definitions:

Equity

The value of an owner's interest in a company, calculated as the difference between the company's assets and liabilities.

Assets

Economic resources owned or controlled by a business or individual that are expected to bring future benefits.

Liabilities

Financial obligations or debts a company owes to others that must be paid in the future.

Assets

Resources owned by a business or individual that have economic value.