When the t-ratio statistics on individual coefficients are all near 0 but the F-test statistic is greater than 20:
A) multicollinearity is suggested.
B) nonconstant variance of the error terms is suggested.
C) serial correlation is suggested.
D) the root-mean-squared error will be large.
E) the Durbin-Watson statistic will be near 0.

Question

Quizplus · Accepted Answer

When the t-ratio statistics on individual coefficients are all near 0 but the F-test statistic is greater than 20, it suggests that there is multicollinearity. This means that the independent variables in the model are highly correlated with each other, which can lead to unstable and unreliable estimates of the coefficients. The high F-test statistic indicates that there is still some overall significant relationship between the independent variables and the dependent variable, but the individual coefficients cannot be trusted.

When the T-Ratio Statistics on Individual Coefficients Are All near 0