Mastering Multicollinearity

• A situation where the dependent variable is not affected by any of the independent variables
• A situation where the dependent variable is perfectly predicted by the independent variables
• A situation where there is no correlation between the independent variables in a regression model
• A situation where two or more independent variables in a regression model are highly correlated (correct)

• Decreased standard errors of the regression coefficients
• Perfect prediction of the dependent variable
• No impact on the standard errors of the regression coefficients
• Increased standard errors of the regression coefficients (correct)

• By comparing the p-values of the regression coefficients
• By examining the correlation matrix of the independent variables (correct)
• By comparing the R-squared values of different regression models
• By examining the correlation matrix of the dependent variable