1. Multicollinearity between independent variables is serious when the correlati

Question

1. Multicollinearity between independent variables is serious when the correlation between pair(s) of dependent variables is _____.

a. zero

b. substantially greater than 1

c. close to +/- 1

d. substantially less than zero

2. In using the multiple regression method, we can model the effects of the different levels of a qualitative independent variable by using a(n):

a. Variance equalizing transformation

b. Dummy (indicator) variable

c. Cross-product term

d. Quadratic term

e. Interaction variable

3. A random sample of 7 observations from the first population resulted in a standard deviation of 13.
A random sample of 9 observations from the second population resulted in a standard deviation of 8.
What is the test statistic for the following hypothesis?

a. 1.6250

b. 1

c. 0.6154

d. 2.6406

e. 0.3787

Explanation / Answer

1) (C)   (close to +/- 1)

2) (b) ( Dummy (indicator) variable)

3) (d) (2.6406)

EXPLANATION :

F = (First population variance/Second poulation variance)

F = 169/64 = 2.6406

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