In a multiple regression analysis, the following correlation matrix was computed. What does the correlation matrix suggest about the independent variables?
A) X1 and X2 are correlated.
B) No correlation between the independent variables.
C) All 4 independent variables are highly correlated with each other, therefore multicollinearity exists.
D) X1 and X4.
E) X2 and X4 are correlated as well as X1 and X3; therefore multicollinearity exists.

Question

In a multiple regression analysis, the following correlation matrix was computed.  What does the correlation matrix suggest about the independent variables?
A) X1 and X2 are correlated. 
B) No correlation between the independent variables. 
C) All 4 independent variables are highly correlated with each other, therefore multicollinearity exists. 
D) X1 and X4. 
E) X2 and X4 are correlated as well as X1 and X3; therefore multicollinearity exists.

Quizplus · Accepted Answer

X2 and X4 are correlated as well as X1 and X3; therefore multicollinearity exists.

In a Multiple Regression Analysis, the Following Correlation Matrix Was