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Basic Question 1 of 3

When multicollinearity is present in a linear regression, which of the following is true?

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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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes

Barnes

Learning Outcome Statements

explain multicollinearity and how it affects regression analysis.

CFA® 2025 Level II Curriculum, Volume 1, Module 3.