If x is closely related to y2(where y and x both are independent variables), how come it is not collinearity problem? I am also not clear on 3. ----------------------- A variable is regressed against three other variables, x, y, and z. Which of the following would NOT be an indication of multicollinearity? X is closely related to: A) 3y + 2z. B) 3. C) 9y, and x is closely related to 4z. D) y2. Your answer: B was incorrect. The correct answer was D) y2. If x is related to y2, the relationship between x and y is not linear, so multicollinearity does not exist. If x is equal to a constant (3), it will be correlated with the intercept term.

The answer is comically wrong about b. On the other hand d is clearly the right answer as you are just doing polynomial regression.

yes. What is 0/0 ?

JoeyDVivre Wrote: ------------------------------------------------------- > The answer is comically wrong about b. On the > other hand d is clearly the right answer as you > are just doing polynomial regression. My thoughts exactly. How can x be correlated with a constant? I am assuming that should be y^2?