If You Drop a Predictor from the Regression Equation

question 36

Multiple Choice

If you drop a predictor from the regression equation

• A) the correlation could increase.
• B) the correlation will probably go down.
• C) the correlation could stay the same.
• D) both b and c

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Definitions:

Uncollectibles

Debts owed to a company that are considered unlikely to be paid and are often written off as bad debt.

Direct Write-off Method

A method of accounting for bad debts that directly writes off unpaid invoices when they are deemed uncollectible.

Uncollectible Receivables

Debts owed to a company that are unlikely to be paid by the debtor, considered as a loss.

Allowance for Doubtful Accounts

A reserve for accounts receivable that may not be collectible and is considered a contra asset on the balance sheet.