Multicollinearity is present when there is a high degree of correlation between the dependent variable and all the independent variables included in the model.
Indicate whether the statement is true or false
Q. 2Multicollinearity is present if the dependent variable is linearly related to one of the explanatory variables.
Indicate whether the statement is true or false
Q. 3If a multiple regression model includes 10 or more predictor variables, it is almost certain that changes in the predictor variables cause changes in the response variable y.
Indicate whether the statement is true or false
Q. 4Multicollinearity is a situation in which two or more of the independent variables are highly correlated with each other.
Indicate whether the statement is true or false
Q. 5Which of the following is an advantage of using stepwise regression compared to just entering all the independent variables at one time?
a. There are no advantages of using stepwise regression over entering all the variables at one time.
b. Stepwise regression allows us to observe the effects of multicollinearity more early than when all variables are entered at one time.
c. Stepwise regression will generally produce a model with larger value for the coefficient of determination.
d. All of these.
e. None of these.
Q. 6Which of the following statements is correct?
a. The number of dummy variables that must be added to a regression model is one less than the number of categories for a qualitative independent variable.
b. A dummy variable is incorporated into a regression model if the dependent variable is qualitative.
c. Including a dummy variable into a regression model will simplify the regression results and help people to interpret the meaning of the regression parameters.
d. The number of dummy variables that must be added to a regression model is one more than the number of categories for a qualitative independent variable.
e. All of these.
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