Perfect multicollinearity is when:
A) two or more independent variables have an exact linear relationship.
B) two independent variables are orthogonal.
C) the r-squared coefficient is zero.
D) the coefficients on two independent variables are equal.

Question

Quizplus · Accepted Answer

Perfect multicollinearity occurs when two or more independent variables have an exact linear relationship, meaning one variable can be perfectly predicted from the others. This causes problems in regression analysis, as it makes it impossible to estimate the individual effects of each variable on the dependent variable.

Perfect Multicollinearity Is When