A regression model displays multicollinearity when ________.

A) the correlation coefficient for dependent variables is 0.7
B) the variance inflation factor is equal to -1.
C) the correlation coefficient for independent variables is 1
D) the variance inflation factor is less than 3

Multicollinearity

A statistical phenomenon where two or more predictor variables in a multiple regression model are highly correlated, potentially distorting estimates.

Correlation Coefficient

The correlation coefficient is a statistical measure that calculates the strength and direction of the relationship between two variables, ranging from -1 to 1.

Variance Inflation Factor

A measure of how much the variance of an estimated regression coefficient increases if your predictors are correlated.