When the Coefficient of Determination Is near 1 but the T-Statistics

question 23

Multiple Choice

When the coefficient of determination is near 1 but the t-statistics are all insignificant,the regression likely suffers from:

• A) nonconstant variance of the error terms.
• B) multicollinearity.
• C) serial correlation.
• D) randomness.
• E) nonidentifiability.

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Definitions:

Bayes' Law

A theorem that describes the probability of an event, based on prior knowledge of conditions that might be related to the event.

Conditional Probabilities

Probabilities of events given the occurrence of some other event.

Likelihood Probabilities

The probabilities that reflect the plausibility of different parameter values given the observed data, used in statistical inference.

Posterior Probabilities

The probabilities assigned to outcomes or hypotheses after taking into account known data and a priori probabilities.