If a decision maker has several potential independent variables to select from in building a regression model, the variable that, by itself, will always be the most effective in explaining the variation in the dependent variable will be the variable that has a correlation closest to positive 1.00.

Question

Quizplus · Accepted Answer

A variable with a correlation closest to positive 1.00 with the dependent variable indicates a strong linear relationship but does not guarantee effectiveness in a regression model due to potential issues like multicollinearity, non-linearity, or the variable not capturing causal relationships.

If a Decision Maker Has Several Potential Independent Variables to Select