When the T-Ratio Statistics on Individual Coefficients Are All near 0

question 30

Multiple Choice

When the t-ratio statistics on individual coefficients are all near 0 but the F-test statistic is greater than 20:

• A) multicollinearity is suggested.
• B) nonconstant variance of the error terms is suggested.
• C) serial correlation is suggested.
• D) the root-mean-squared error will be large.
• E) the Durbin-Watson statistic will be near 0.

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Definitions:

Target Profit

The financial goal for the profit a company aims to achieve within a specific period.

High-Low Method

A cost accounting technique used to estimate fixed and variable costs by analyzing the highest and lowest levels of activity.

Variable Cost

Expenses that change directly in relation to fluctuations in production levels or the volume of sales.

Fixed Cost

Expenses that do not change with the level of goods or services produced by the business over a given period.