Multiple Choice
Consider the following to answer the question(s) below:
A regression equation that predicts the price of homes in thousands of dollars is = 24.6 + 0.055x1, where x1 is a variable that represents the assessed value of the house and x2 is an indicator variable that represents whether the house is on a busy street (1 = yes, 0 = no) .
-The regression model mentioned above resulted in a high R2 and large F, but individual t-statistics were not significant. Which of the following statements is true?
A) We would suspect homoscedasticity in the model.
B) We would suspect autocorrelation in the model.
C) We would suspect collinearity in the model.
D) We would suspect that the model contains influential points.
E) We would suspect that the model contains high-leverage points.
Correct Answer:

Verified
Correct Answer:
Verified
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