Question

Multiple Choice Questions
[2 Marks Each]
1. Multi-collinearity occurs when
a. Two or more independent variables are perfectly correlated with one another.
b. The independent variables are highly correlated with the error term.
C. The independent variable is highly correlated with the dependent variable.
d. None of the above.​

Answer 1

Explanation:

Multicollinearity is when independent variables in a regression model are ... The stronger the correlation, the more difficult it is to change one variable ... You don't feel like you know the actual effect of each variable!

Answer 2

Explanation:

Multicollineaeity occurs when independent variables in a regression model are correlated is a problem because independent variables should be independent.If the degree of correlation between variables is high enough, it can cause problems when you fit the model and interpret the results