In stepwise regression procedure, what occurs if two independent variables are highly correlated?
A) Both variables will enter the equation.
B) Only one variable will enter the equation.
C) Neither variable will enter the equation.
D) A third variable equal to their sum will replace them in the equation.

Question

Quizplus · Accepted Answer

If two independent variables are highly correlated, they are providing redundant information and only one of them is necessary in the regression equation. In stepwise regression, the algorithm selects the variable that contributes the most to the model's accuracy at each step, so only one of the highly correlated variables will be chosen to enter the equation.

In Stepwise Regression Procedure, What Occurs If Two Independent Variables