If the Multiple Coefficient of Determination That Relates X₂ to All

question 8

Essay

If the multiple coefficient of determination that relates x₂ to all the other independent variables,R²(x₂)= .94,calculate the variance inflation factor for x₂.Should the analyst be concerned about multicollinearity? Why?

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Definitions:

Decimal Point

A dot or small symbol used to separate the integer part from the fractional part of a number written in decimal form.

Multiplication

A fundamental mathematical operation that represents the repeated addition of a number by itself a specified number of times.

Division

In business, a division refers to a distinct part of a company that focuses on a particular market, product line, or service, often operating with a certain degree of independence.

Decimal Point

A symbol used to separate the integer part from the fractional part of a number in decimal notation.