Which of the Following Statements Describing the Consequences of Collinearity

question 12

Multiple Choice

Which of the following statements describing the consequences of collinearity in a model is not true?

• A) The value of the Variance Inflation Factor will be high.
• B) An estimated coefficient may have an unexpected sign or size being large or small.
• C) The F-statistic for the model may indicate overall significance, but most or all of the individual coefficients have t-statistics showing insignificance.
• D) Collinearity occurs when two or more predictor variables are correlated.
• E) When a predictor is collinear with the other predictors in the model, the standard error of its coefficient is always small and t-statistic always large.

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