When does multicollinearity occur in a multiple regression analysis?
A)When the dependent variables are highly correlated
B)When the regression coefficients are correlated
C)When the independent variables are highly correlated
D)When the independent variables have no correlation

Question

Quizplus · Accepted Answer

Multicollinearity occurs when the independent variables in a multiple regression analysis are highly correlated. This means that one independent variable can be predicted by another independent variable, resulting in unreliable and unstable regression coefficients. High correlation between dependent variables may also indicate multicollinearity, but it is not the primary factor.

When Does Multicollinearity Occur in a Multiple Regression Analysis