If the Correlation Between the Two Independent Variables of a Regression

question 24

Multiple Choice

If the correlation between the two independent variables of a regression analysis is 0.11,and each independent variable is highly correlated to the dependent variable,what does this indicate?

• A)Multicollinearity between these two independent variables.
• B)A negative relationship is not possible.
• C)Only one of the two independent variables will explain a high percent of the variation.
• D)An effective regression equation.

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Definitions:

Revenue Account

An accounting ledger that records the income generated from sales of goods or services.

Profit Margin

A financial metric that indicates the percentage of revenue that exceeds the cost of goods sold.

Net Sales

The total revenue from sales minus any deductions for returned goods, allowances, and discounts.

Net Income

The remaining earnings of a company after deducting all expenses and taxes from the gross revenues.