Multicollinearity Between Independent Variables Is Serious If the Mean Variance

question 16

Multiple Choice

Multicollinearity between independent variables is serious if the mean variance inflation factor is:

• A)Substantially less than 1.
• B)Substantially greater than 1.
• C)Between -1 and +1.
• D)Less than .5.
• E)Substantially less than zero.

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Definitions:

Markup Percent

The percentage increase on the cost price of goods to arrive at the selling price.

Selling Price

The amount of money for which a product or service is sold to customers.

Markup Percent

The percentage added to the cost price of goods to cover overhead and profit.

Markup Percent

The markup on the original cost of goods intended to cover running costs and generate profit.