Which of the following relationships among the variables used in a simple regres

Question

Which of the following relationships among the variables used in a simple regression analysis would be preferable?

a. the independent variables are highly correlated with one another and have low correlations with the dependent variable

b. the independent variable has a high correlation with the depenent variable

c. the independent variables are higly correlated with one another and have high correlations with the dependent variable

d. generalizations of these types cannot be made

e. none of the above

Explanation / Answer

In regression analysis, the independent variables should be

uncorrelated between themselves, otherwise the problem of

multicollinearity will arise.

Also the independent variables should be highly correlated

with the dependent variable in order to have good explanatory

power.

Hence, Option (b) is the correct choice. (Ans).

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