When does multicollinearity occur in a multiple regression analysis?
A) Dependent variables are highly correlated.
B) Independent variables are minimally correlated.
C) Independent variables are highly correlated.
D) Independent variables have no correlation.

Question

Quizplus · Accepted Answer

Multicollinearity occurs when independent variables in a multiple regression analysis are highly correlated with each other. This means that there is redundancy in the information provided by the variables, which can lead to unstable and unreliable coefficient estimates in the model. Therefore, it is important to identify and address multicollinearity in order to ensure the validity and accuracy of the regression results.

When Does Multicollinearity Occur in a Multiple Regression Analysis