Three predictor variables are being considered for use in a linear regression model. Given the correlation matrix below, does it appear that multicollinearity could be a problem?
Definitions:
Compound Interest
A way of calculating interest whereby the charge is based on the initial principal amount as well as on the interest that has accumulated in prior periods of a loan or deposit.
Cash Inflow
Money received by a business, typically from operational, investing, and financing activities.
Net Present Value
The difference between the present value of cash inflows and outflows over a period of time, used to assess the profitability of an investment.
Compound Interest
This refers to the calculation of interest on both the initial amount deposited or borrowed as well as on the interest that has already been accumulated over previous periods.
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