Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Basic Question 2 of 3
Multicollinearity in linear regression is caused by:
II. The dependent variable and an independent variable being highly correlated with each other.
III. Two or more dependent variables being highly correlated with each other.
IV. Two or more independent variables being highly correlated with each other.
I. Heteroskedastic and serially correlated residuals.
II. The dependent variable and an independent variable being highly correlated with each other.
III. Two or more dependent variables being highly correlated with each other.
IV. Two or more independent variables being highly correlated with each other.
User Contributed Comments 1
| User | Comment |
|---|---|
| danlan2 | This is the definition |
Your review questions and global ranking system were so helpful.
Lina
Learning Outcome Statements
explain multicollinearity and how it affects regression analysis.
CFA® 2025 Level II Curriculum, Volume 1, Module 3.