Exam 15: Multiple Regression

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Outliers can affect the slope of regression coefficients.

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It is common to compare β coefficients across different models.

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If a nominal variable has five categories, an analyst would include up to four dummy variables in a regression model.

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The error term plot shows the relationship between the predicted dependent variable and the error term.

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The lack of a pattern in the error term plot that is distributed around (0,0) indicates that the net effect of all variables excluded from the model on the dependent variable is zero.

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A nomothetic mode of explanation isolates the most important factors.

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The regression coefficient of a dummy variable is interpreted as the effect of that variable on the dependent variable, controlled for all other variables in the model.

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The effect of omitting a relevant variable is to inflate the value of variables that are included.

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Full model specification means that all variables are measured that affect the dependent variable.

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Standardized coefficients enable analysts to draw inferences about the relative impact of different independent variables on the dependent variable.

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When two variables are strongly correlated with each other, they are also multicollinear.

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Each of the regression coefficients is interpreted as its effect on the dependent variable, controlled for the effect of all of the other independent variables included in the regression.

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In multiple regression, the adjusted R2 controls for the number of dependent variables.

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The search for parsimonious explanations often leads analysts to first identify different categories of factors that most affect their dependent variable.

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It is okay to include irrelevant variables as long as they are significant.

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Curvelinearity is indicated by residuals that are linearly related to each other.

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The global F-test examines the overall effect of all independent variables jointly on the dependent variable.

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Multiple regression is one of the most widely used multivariate statistical techniques for analyzing three or more variables.

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Heteroscedasticity is addressed by transforming both the dependent and the independent variables.

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Heteroscedasticity occurs when one of the dependent variables is linearly related to the independent variable.

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