Multicollinearity Is A(n)

question 2

Multiple Choice

Multicollinearity is a(n) :

• A) statistical procedure that estimates regression equation coefficients which produce the lowest sum of squared differences between the actual and predicted values of the dependent variable.
• B) statistical technique which analyzes the linear relationship between a dependent variable and multiple independent variables by estimating coefficients for the equation for a straight line.
• C) estimated regression coefficient that has been recalculated to have a mean of zero and a standard deviation of 1.
• D) statistic that compares the amount of variation in the dependent measure "explained" or associated with the independent variables to the "unexplained" or error variance.
• E) situation in which several independent variables are highly correlated with each other.

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Definitions:

Internal Rate

Often referred to as the Internal Rate of Return (IRR), it is the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equal zero.