A major concern that arises with multiple regression is multicollinearity, which exists when ________.
A) the dependent variable is not normally distributed
B) the standard errors of the coefficients of the individual variables decrease
C) the R2 statistic is low
D) two or more independent variables are highly correlated with one another

Question

Quizplus · Accepted Answer

Multicollinearity exists when two or more independent variables are highly correlated with one another. This can cause issues with the interpretation of coefficients and can lead to unstable and unreliable regression models. A, B, and C are not accurate descriptions of multicollinearity.

A Major Concern That Arises with Multiple Regression Is Multicollinearity