If the correlation between the two independent variables of a regression analysis is 0.11,and each independent variable is highly correlated to the dependent variable,what does this indicate?
A)Multicollinearity between these two independent variables.
B)A negative relationship is not possible.
C)Only one of the two independent variables will explain a high percent of the variation.
D)An effective regression equation.

Question

Quizplus · Accepted Answer

A correlation of 0.11 between the two independent variables indicates a very low level of multicollinearity, which is beneficial for regression analysis. The fact that each independent variable is highly correlated with the dependent variable suggests that including both in the regression equation could lead to an effective model in explaining the variation in the dependent variable.

If the Correlation Between the Two Independent Variables of a Regression