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Basic Question 1 of 3
When multicollinearity is present in a linear regression, which of the following is true?
II. The regression cannot be estimated.
III. The interpretation of the regression is problematic.
IV. The t-statistics will be too large.
I. The residuals will be serially correlated.
II. The regression cannot be estimated.
III. The interpretation of the regression is problematic.
IV. The t-statistics will be too large.
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Learning Outcome Statements
explain multicollinearity and how it affects regression analysis.
CFA® 2025 Level II Curriculum, Volume 1, Module 3.